If the Price Falls and the Total Amount Consumers Spend

question 18

Multiple Choice

If the price falls and the total amount consumers spend on the good falls, then demand must be

• A)elastic.
• B)inelastic.
• C)perfectly inelastic.
• D)perfectly elastic

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Definitions:

Market Value

The price at which an asset would trade in a competitive auction setting.

Equity Method

An accounting technique used by firms to assess the profits earned by their investments in other companies, by reporting these profits proportionate to their stake.

Dividend Policy

A company's strategy or policy outlining how often dividends will be paid out to shareholders and in what amount.

Reported Income

The income figure that a company officially reports to its shareholders and regulatory bodies, often after adjustments and before taxes.