Which of the Following Formulas Calculates Price Elasticity of Demand

question 88

Multiple Choice

Which of the following formulas calculates price elasticity of demand?

• A) ln (1 + % change in quantity sold) / ln (1 + % change in price)
• B) (1 + % change in quantity sold) / (1 + % change in price)
• C) % change in quantity sold / % change in price
• D) ln (1 - % change in quantity sold) / ln (1 - % change in price)

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Definitions:

Return on Investment

A financial ratio that calculates the percentage gain or loss on an investment relative to the cost of the investment, indicating the efficiency of the investment.

Investment Turnover

The ratio of sales to invested assets.

Profit Margin

A financial metric, calculated as net income divided by revenue, that indicates the percentage of sales that exceeds the costs of goods sold.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.