Suppose That When the Price of Cereal Rises 10 Percent,the

question 160

Multiple Choice

Suppose that when the price of cereal rises 10 percent,the quantity demanded of cereal falls by 5 percent.Based on this information,what is the approximate price elasticity of demand for cereal?

• A) 0.5
• B)-0.5
• C) 2.0
• D)-2.0
• E) 0

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Definitions:

Increase in Cash

An upward movement in the cash balance of a business during a specific period of time.

Direct Method

In accounting, a cash flow statement preparation approach that lists specific cash inflow and outflow categories directly.

Operating Activities

Business activities directly related to the production, sale, and delivery of a company's products and services, generating revenue and expenses.

Accounts Receivable

Receivables due from clients to a business for products delivered or services performed but not yet compensated.