Statement I: a Perfectly Elastic Demand Curve Has the Same

question 57

Multiple Choice

Statement I: A perfectly elastic demand curve has the same elasticity as a perfectly inelastic demand curve.
Statement II: When elasticity is .2,a 1% decline in price will raise quantity demanded by .2%.

• A)Statement I is true and statement II is false.
• B)Statement II is true and statement I is false.
• C)Both statements are true.
• D)Both statements are false.

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Definitions:

Cash Flow

The sum of funds being moved into and out of a company, particularly in relation to its cash flow.

Financing Activities

All transactions (other than interest payments) involving borrowing from creditors or repaying creditors as well as transactions with the company’s owners.

Cash Flow

The total amount of money being transferred into and out of a business, measuring its financial health.

Accounts Payable

Liabilities of a business representing money owed to creditors for goods and services received.