If the Demand for Table Salt Were Perfectly Inelastic at All

question 155

Multiple Choice

If the demand for table salt were perfectly inelastic at all prices,a decrease in supply would

• A)increase the price and decrease the quantity demanded.
• B)increase the price while not affecting the quantity demanded.
• C)reduce the quantity demanded to zero no matter what the initial price.
• D)have no effect on either price or quantity demanded.

Understand the concept and implications of transfer pricing within a company.

Grasp the significance of setting transfer prices and the approaches used.

Understand and identify the differences between investment centers and profit centers.

Calculate investment turnover and understand its implications.

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Definitions:

Contract Rate

A predefined interest rate agreed upon in a financial contract which determines the interest payments for the duration of the contract.

Semiannually

A period occurring twice a year, typically used in the context of payments, interest accrual, or reporting.

Retired the Bonds

The process by which a company pays off or redeems its outstanding bonds before their maturity date, removing the liability from its balance sheet.

Bond Sinking Fund

A reserved fund established by a corporation or government entity to set aside money over time for the purpose of repaying bonds.