The Absolute Price Elasticity of Demand for a Vertical Demand

question 196

Multiple Choice

The absolute price elasticity of demand for a vertical demand curve

• A) is infinite.
• B) is 1.0.
• C) is 0.
• D) depends on where one is on the demand curve.

---

Definitions:

Stock Price

This is the cost of a single share of a company’s stock, a direct reflection of what investors believe a company is worth.

Stock Dividend

A dividend payment made to shareholders in the form of additional shares rather than cash, adjusting the ownership proportionately.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuing party, often used in the accounting of share capital.

Capital in Excess of Par

The amount by which the proceeds from the issuance of shares exceed the par value of the shares, often recorded in the shareholders' equity section of the balance sheet.