If Demand Is Price-Elastic, Then

question 80

Multiple Choice

If demand is price-elastic, then

• A) The elasticity number E is greater than 1.
• B) The elasticity number E is less than 1.
• C) The elasticity number E is equal to 1.
• D) The elasticity number E is 0.

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Definitions:

Return on Inventory

A financial metric used to assess how effectively a company generates profits from its inventory investments.

Return on Stockholders' Equity

A financial ratio that measures the profitability of a corporation in relation to stockholders' equity, indicating how effectively equity is used to generate profits.

Asset Management Ratios

Those ratios—accounts receivable turnover, average collection period, inventory turnover, and asset turnover—which measure how effectively a company uses its assets.

Company's Ability

A broad concept referring to a business's capacity to execute its strategies and achieve its objectives effectively.