When the Percentage Change in Quantity Demanded Is Less Than

question 49

Multiple Choice

When the percentage change in quantity demanded is less than the percentage change in price:

• A) demand is price elastic.
• B) demand is price inelastic.
• C) an increase in price will result in lower total revenue.
• D) total revenue will be zero at the midpoint of a linear demand curve.

---

Definitions:

Zero Growth Model

A valuation method assuming a company will not grow and will continue to pay a constant dividend indefinitely.

Stock Valuation

The process of determining the intrinsic value of a stock based on future earnings, dividend payouts, and other factors to decide whether a stock is overvalued, undervalued, or fairly priced.

Supernormal Growth Stock

Stocks of companies expected to experience higher than average growth rates in earnings or revenues in the future.