If the Price Elasticity of Demand Is -4

question 96

Multiple Choice

If the price elasticity of demand is -4.0,a 5 percent decrease in price will increase quantity demanded by

• A) 0.8 percent.
• B) 1.25 percent.
• C) 20 percent.
• D) 80 percent.
• E) 125 percent.

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Definitions:

Consolidation

The process of combining the financial statements of separate companies into a single, aggregated financial statement.

Consolidated Retained Earnings

The cumulative amount of earnings of a corporation and its subsidiaries after dividends have been paid, as reported in consolidated financial statements.

Retained Earnings

The portion of net profits left in the company after dividends have been paid to shareholders.

Voting Shares

Shares that give the shareholder the right to vote on matters of corporate policy and the election of board members.