If the Absolute Price Elasticity of Demand of a Good

question 389

Multiple Choice

If the absolute price elasticity of demand of a good is 1.8, then the total revenues will increase if its market price

• A) increases.
• B) decreases.
• C) stays the same.
• D) changes, but we can't tell without more information if the price increases or decreases.

---

Definitions:

Net Working Capital Turnover

A ratio indicating how effectively a company generates sales for every unit of working capital used over a period.

Accounts Payable

The amount of money that a company owes to its creditors or suppliers for goods and services received but not yet paid for.

Net Income

The total earnings of a company after deducting all expenses, taxes, and losses.

Cash Ratio

A liquidity metric that measures a company’s ability to cover its short-term liabilities with its cash and cash equivalents.