Suppose We Find That the Price Elasticity of Demand for a Product

question 218

Multiple Choice

Suppose we find that the price elasticity of demand for a product is 3.5 when its price is increased by 2 percent. We can conclude that quantity demanded

• A)increased by 7 percent.
• B)decreased by 7 percent.
• C)decreased by 9 percent.
• D)decreased by 1.75 percent.

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Definitions:

Work Sheet

A document used in accounting to gather information from ledger accounts for the preparation of financial statements.

Temporary Accounts

Accounts used to collect revenues, expenses, and dividends information which are then transferred to permanent accounts at the end of the accounting period.

Closed

Refers to an account or period that has been concluded and no longer accepts entries or transactions.

Accrual Basis

An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when the cash is exchanged.