If = 150, and Price Decreases by 20 Percent, Then

question 45

Multiple Choice

If = 1.50, and price decreases by 20 percent, then:

• A)quantity demanded will decrease by 30 percent.
• B)quantity demanded will increase by 30 percent.
• C)total revenue will remain unchanged.
• D)total revenue will decrease.
• E)quantity demanded will increase by 3 percent.

---

Definitions:

Retained Earnings

This is the amount of net income left after a company has paid out dividends to its shareholders, typically reinvested in the business or held as a reserve.

Goodwill

An intangible asset that arises when a company acquires another company for a price higher than the fair market value of its net assets, representing future economic benefits.

Investment in Subsidiary

A financial stake held by a parent company in a subsidiary, characterized by ownership of more than 50% of the subsidiary's voting stock.

Pre-acquisition Profits

Earnings generated by a subsidiary prior to being acquired by a parent company, often considered in the determination of goodwill or investment value.