Which of the Following Statements About Demand Elasticity Is Correct

question 79

Multiple Choice

Which of the following statements about demand elasticity is correct?

• A)If demand is price-inelastic,an increase in price will reduce total expenditures.
• B)If demand is price-elastic,an increase in price will increase total expenditures.
• C)If demand is price-inelastic,an increase in price will increase total expenditures.
• D)If demand is price-elastic,an increase in price will leave total expenditure unchanged.

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Definitions:

Present Value

Present value is the current worth of a future sum of money or stream of cash flows, given a specified rate of return, adjusting for the time value of money.

Annuity

An annuity is a financial product that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees.

Internal Rate of Return

A financial metric used to evaluate the profitability of potential investments, measuring the rate of return where the net present value of all cash flows from a particular project equals zero.

Present Value Factors

Mathematical factors used in calculating the present value of future cash flows, considering the time value of money.