If the Price Elasticity of Demand for a Product Is

question 182

Multiple Choice

If the price elasticity of demand for a product is 1 in absolute value, and the price elasticity of supply of the same product is 1, what is the predicted percent change in price from a 1 percent increase in demand?

• A) a rise in price of 0.5 percent
• B) a rise in price of 2 percent
• C) a fall in price of 0.5 percent
• D) a fall in price of 2 percent

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Definitions:

Perpetual Inventory Systems

are accounting methods where inventory records are updated immediately whenever a transaction happens, providing real-time inventory levels.

Computers

Electronic devices capable of processing information according to a set of instructions called programs.

Stocks

Financial instruments representing ownership shares in a company, allowing investors a claim on part of the company's profits.

Just-in-time Inventory System

A strategy to increase efficiency and decrease waste by receiving goods only as they are needed in the production process.