Answer:
The answer is (A) an increase or a decrease in price does not significantly affect the demand for a product.
Explanation:
Inelastic demand refers to a condition where demand does not change even when price changes. An example of this is the demand for gasoline – even when price increases, the amount consumed by customers do not drop as drastically. There are two types of inelastic demand: relatively inelastic demand and perfectly inelastic demand. When the first occurs, high price increase is followed by a relatively low drop in demand. When the second occurs instead, high price increase is followed by no drop in demand.
What? This is a little confusing
Answer:
D. More Units may be sold - but total revenue will be less than it would be at the higher price
Explanation:
Marginal Revenue (MR) represents the additional revenue that can be obtained if sales of a product are increased by one unit.
MR= is change in Total Revenue/Change in Total Output Quantity
In this situation as envisaged by the Marketing Manager, a price cut will lead to an increase in revenue based on more (marginal) units of the product sold at a lower price. The challenge, however, is that this increase in income will not be enough to offset the decrease in revenue that will result as a result of the price cut.
In other words, the organisation is better off selling fewer products or units at its current price than sell more (marginal units) at a reduced price.
Answer:
Depreciation expense is added back to net income when preparing the cash flow from operating activities section because depreciation represents a non cash reduction to net income. Depreciation is a non cash reduction because it notes down the the reduction in the value of an asset due to use as an expense and because the company isn't making any cash transactions due to depreciation of assets therefore it is a non cash expense and this is why it is added back to net income when preparing cash flow from operating activities.
Explanation:
