If the Price of a Certain Brand of Sneakers Falls

question 85

Multiple Choice

If the price of a certain brand of sneakers falls from $27.50 to $22.50,and the quantity demanded by consumers increases from 15 to 25 pairs per week,then the price elasticity of demand is

• A)0.25
• B)1.00
• C)2.75
• D)1.50
• E)2.50

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Definitions:

Zero Growth Stock

A stock from a company which is expected to see no growth in dividends or earnings, typically offering high initial dividend yields.

Annual Dividend

The total amount of dividends that a company pays out to its shareholders over a single fiscal year.

Required Rate of Return

The minimum return that investors expect to earn from their investment in a particular asset, considering the risk associated with it.

Dividend

A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits.