When the Price of a Good Increases by 6 Percent,the

question 156

Multiple Choice

When the price of a good increases by 6 percent,the quantity demanded decreases by 3 percent.Most likely,this good ________ and ________.

• A)is a necessity;has poor substitutes
• B)has poor substitutes;is a luxury
• C)is a necessity;has good substitutes
• D)is a luxury;is narrowly defined
• E)is a luxury;has experienced a recent price change

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Definitions:

Profit Centers

Divisions or departments within a business that are treated as separate entities for the purpose of financial reporting, with their own revenues and expenses.

Sales

Transactions between a seller and a buyer where goods or services are exchanged for money.

Costs

The monetary value required to produce goods or services, including materials, labor, and overhead.

Transfer Price

The price at which divisions of a company transact with each other, such as the sale of goods or services, often used for internal accounting.