Hanvold Company Recently Changed the Selling Price of One of Its

question 16

Multiple Choice

Hanvold Company recently changed the selling price of one of its products. Data concerning sales for comparable periods before and after the price change are presented below. $$\begin{array} { c c } \text { Selling Price } & \text { Unit Sales } \\\$ 30.00 & 1,700 \\\$ 32.00 & 1,410\end{array}$$ The product's price elasticity of demand as defined in the text is closest to:

• A)-3.14
• B)-3.55
• C)-4.72
• D)-2.90

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Definitions:

Corporate Profits Tax

A tax imposed by governments on the income earned by companies and corporations.

Labor Supply

The total amount of hours employees are ready and capable of working for a specified rate of pay.

Payroll Tax

A tax imposed on employers or employees, and is typically calculated as a percentage of the salaries that employers pay their staff.

Tax Shifting

The process whereby the economic burden of a tax is passed on from one group to another.