The Price of Product X Is Reduced from $100 to $90

question 173

Multiple Choice

The price of product X is reduced from $100 to $90 and, as a result, the quantity demanded increases from 50 to 60 units. Therefore, demand for X in this price range

• A)has declined.
• B)is of unit elasticity.
• C)is inelastic.
• D)is elastic.

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Definitions:

Reinvested

The process of using earned profits or dividends to purchase additional shares or assets, rather than distributing them as dividends.

Investment

Allocation of resources, such as time, money, or effort, in hope of future benefits or returns.

Future Value

The eventual worth of an asset or cash that matches the value of a predetermined present sum.

Compounding

The process where the value of an investment increases because the earnings on an investment, both capital and interest, earn interest as time passes.