Assume the Price Elasticity of Demand for JT Chip Co

question 94

Multiple Choice

Assume the price elasticity of demand for JT Chip Co.chips is 4.0.If the company decreases the price of each bag of chips from $1.89 to $1.49,the number of bags sold will

• A)Decrease by 78 percent.
• B)Increase by 95 percent.
• C)Increase by 48 percent.
• D)Increase by 78 percent.

---

Definitions:

Required Rate

The minimum acceptable return on an investment or project, often used in capital budgeting.

Annuity

A fiscal instrument that provides a consistent flow of income to a person, often employed as a revenue source for those in retirement.

Internal Rate

A term often not complete on its own, likely referring to "Internal Rate of Return (IRR)," which is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Present Value Tables

A set of tables that provide the factor needed to calculate the present value of a single payment or series of payments to be received in the future.