Suppose the Price Elasticity of Demand for Some Good Is

question 43

Multiple Choice

Suppose the price elasticity of demand for some good is 1.4.A 10% increase in the price of the good results in

• A)a 1.4% decrease in the quantity demanded.
• B)a 1.4% increase in the quantity demanded.
• C)a 14% increase in the quantity demanded.
• D)a 14% decrease in the quantity demanded.
• E)There is not enough information to answer this question.

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Definitions:

Effective-Interest Method

An accounting practice used to amortize the discount or premium on bonds payable over the bond’s life, reflecting a constant rate of interest.

Bonds

Long-term debt securities issued by corporations or governments, promising to pay the holder a specified amount of interest over a set period of time before returning the principal amount.

Amortization

The process of gradually writing off the initial cost of an intangible asset over a period of time, reflecting its consumption, expiration, or obsolescence.

Accounting Period

The time period covered by the financial statements.