If E₁ Is the Demand Elasticity for a Product After

question 54

Multiple Choice

If E₁ is the demand elasticity for a product after a price change has been in effect one day,E₂ is the demand elasticity for that product after one week,and E₃ is demand elasticity for that product after one month,

• A)|E₁| > |E₂| > |E₃|
• B)|E₂| > |E₃| > |E₁|
• C)|E₃| > |E₁| > |E₂|
• D)|E₃| > |E₂| > |E₁|

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Definitions:

Rate of Return

The rate of return is a measure of the profitability of an investment, calculated as the percentage of the total amount of returned income to the amount of the investment’s initial cost.

Annual Dividend

An annual profit sharing from a corporation to its shareholders, usually in the form of a payment.

Future Value

The future financial worth of an asset or cash that equates to a designated current sum.

Cash Flows

The whole summation of cash transfers affecting a business's in and outflows, prominently affecting its quick access to funds.