Suppose That a 1% Decrease in the Price of a Good

question 121

Multiple Choice

Suppose that a 1% decrease in the price of a good results in a 0.5% decrease in the quantity supplied.Supply would be categorized as being

• A) perfectly inelastic.
• B) perfectly elastic.
• C) inelastic.
• D) elastic.
• E) unitary elastic.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on a standard rate.

Direct Materials Purchases Variance

The difference between the actual cost of direct materials purchased and the expected (budgeted) cost of these materials.

Standard Direct Labor-Hours

The estimated amount of labor time required to produce one unit of output, based on established standards.

Variable Overhead Rate Variance

The difference between the actual and the standard cost of variable overheads in a production process.