Which of the Following Will Increase Return on Equity

question 7

Multiple Choice

Which of the following will increase return on equity?

• A)An increase in sales with a proportionate increase in costs and expenses
• B)An increase in sales relative to the asset base
• C)A decrease in leverage
• D)A decrease in sales

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Definitions:

Perfectly Inelastic

A situation where the demand or supply for a good is completely unresponsive to changes in price.

Deadweight Loss

A loss of economic efficiency that can occur when the optimal allocation of resources is not achieved, often due to market failures or government interventions.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price.

Deadweight Loss

An inefficiency in the economy caused by the lack of or inability to attain equilibrium in the market for a particular good or service.