The Price Elasticity of Demand for Stork Ice Cream Is

question 281

Multiple Choice

The price elasticity of demand for Stork ice cream is -4.Suppose you're told that following a price increase, quantity demanded fell by 10 percent.What was the percentage change in price that brought about this change in quantity demanded?

• A)40 percent
• B)25 percent
• C)2.5 percent
• D)0.4 percent

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Definitions:

Sales

Transactions involving the transfer of goods or services from a seller to a buyer in exchange for money or other considerations.

Days' Sales in Receivable

A financial metric that calculates the average number of days it takes for a company to collect payments after a sale has been made.

Financial Records

Documents that capture all financial transactions of a business or individual, including income, expenses, assets, and liabilities.

Accounts Receivable Turnover

A financial ratio that measures how effectively a company collects cash from credit sales by comparing net credit sales with the average balance of accounts receivable.