Elastic Demand Exists When

question 36

Multiple Choice

Elastic demand exists when

• A) a small percentage decrease in price produces a smaller percentage increase in quantity demanded.
• B) a small percentage decrease in price produces a larger percentage increase in quantity demanded.
• C) an increase in price causes a larger increase in quantity demanded.
• D) the quantity demanded remains the same regardless of level of price.
• E) no change in price produces a small percentage change in quantity demanded.

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Definitions:

Unrealized Gains

Increases in the value of assets that have not yet been sold and therefore not turned into cash.

Historical Cost

The original purchase price or cost of acquiring an asset, not adjusted for inflation or market changes.

Equity Method

An accounting technique used to record investments in other companies, recognizing the investor's share of the investee's net income.

Parent Company

A company that holds enough voting stock in another firm to control management and operations by influencing or electing its board of directors.