If Consumers Completely Cease Purchasing a Product When Its Price

question 82

Multiple Choice

If consumers completely cease purchasing a product when its price increases by any amount,demand is classified as being

• A) inelastic.
• B) perfectly inelastic.
• C) unit-elastic.
• D) perfectly elastic.
• E) elastic.

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Definitions:

Unit Variable Cost

The cost associated with producing one additional unit of product, which varies with the level of production.

Units Of Activity

A depreciation method that allocates the cost of an asset based on its usage, activities, or units produced instead of time.

Direct Materials Cost

The cost of materials that are an integral part of the finished product.

Fixed Cost

A cost that remains constant in total regardless of changes in the level of activity, such as lease payments and managerial salaries.