The Demand Curve for Microwave Popcorn Is Linear

question 435

Multiple Choice

The demand curve for microwave popcorn is linear. Which of the following definitely makes the demand for microwave popcorn more inelastic?

• A) a decrease in the price of microwave popcorn
• B) an increase in the price of microwave popcorn
• C) an increase in income
• D) a decrease in income

---

Definitions:

Operating Leverage

A financial concept that measures the extent to which a firm can increase operating income by increasing revenue, highlighting the impact of fixed versus variable costs.

Break-even Point

The point at which total costs equal total revenue, meaning the business makes neither a profit nor a loss.

Variable Cost

Costs that change in proportion to the level of production or business activity, such as materials, labor, and utility costs.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salary, or insurance, providing stability to a company's expense structure.