If a 10% Decrease in the Price of Good Leads

question 100

Multiple Choice

If a 10% decrease in the price of good leads to a 20% increase in the quantity demanded of that good,the price elasticity of demand for that good would be:

• A)½.
• B)2.
• C)10.
• D)20.

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Definitions:

Common Stock

Equity shares of a corporation that provide voting rights and represent a claim on a portion of the company's profits in the form of dividends.

Net Income

The amount of money left over after all expenses and taxes are subtracted from total revenue.

Acquisition Cost

The total cost incurred to acquire an asset, including the purchase price and all other expenses necessary to bring the asset into its intended use.

Available-for-Sale Securities

Financial assets that are neither held for trading purposes nor intended to be held to maturity, which can be sold in response to liquidity needs.