Suppose the Government of Nova Scotia Wants to Reduce the Consumption

question 110

Multiple Choice

Suppose the government of Nova Scotia wants to reduce the consumption of electricity by 5 percent.The price elasticity of demand for electricity is 0.40.You advise the Nova Scotia government to

• A)raise the price of electricity by 12.5 percent.
• B)raise the price of electricity by 2 percent.
• C)lower the price of electricity by 12.5 percent.
• D)raise the price of electricity by 8 percent.
• E)lower the price of electricity by 2 percent.

---

Definitions:

Cost Formulas

Equations used to calculate costs, including both fixed and variable components, for budgeting and cost management purposes.

Activity Variances

The differences between planned activity levels and actual activity levels, and the impact of these differences on a company's costs.

Personnel Expenses

Costs associated with employee compensation, including wages, salaries, benefits, and taxes.

Cost Drivers

Factors that cause the cost of an activity or process to change.