The Price Elasticity of Demand for Widgets Is 0

question 38

Multiple Choice

The price elasticity of demand for widgets is 0.80.Assuming no change in the demand curve for widgets,a 16 percent increase in sales implies a:

• A) 1 percent reduction in price.
• B) 12 percent reduction in price.
• C) 40 percent reduction in price.
• D) 20 percent reduction in price.

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Definitions:

Disbursement Float

The time delay between when a check is issued and when it is actually deducted from the payer's bank account, affecting cash management.

Transaction

An agreement or exchange between two parties that involves the sale, purchase, or trade of goods, services, or information.

Book Balance

The Book Balance represents the amount of money a company records in its accounting records, not necessarily reflecting the available or actual cash on hand.

Available Cash Balance

The amount of cash that a company has on hand after accounting for all operational and investment expenses.