If a Price Increase from $8 to $10 Causes Quantity

question 158

Multiple Choice

If a price increase from $8 to $10 causes quantity demanded to fall from 500 to 400,what is the absolute value of the own price elasticity at a price of $10?

• A) 0.80
• B) 1.25
• C) 1.00
• D) 0.75

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Definitions:

Customer Refund Payable

A liability account representing the obligation of a business to return money to a customer due to overcharging or returning merchandise.

Accounting Equation

A fundamental financial principle representing the relationship between an entity’s assets, liabilities, and equity; expressed as Assets = Liabilities + Equity.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the owners' share of the company.

Statement

A written record detailing the financial performance or position of a company at a specific point in time.