Demand Is More Price-Elastic

question 38

Multiple Choice

Demand is more price-elastic

• A)In the long run.
• B)If the product is a necessity.
• C)If the product is a small part of the consumer's budget.
• D)If the product has very few substitutes.

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Definitions:

Margin of Safety

The difference between actual or expected sales and the break-even point, indicating the amount of sales that can decline before a firm incurs a loss.

Contribution Margin Ratio

A financial metric that represents the contribution margin as a percentage of total sales, assessing the profitability and efficiency of production.

Operating Income

Income generated from normal business operations, excluding expenses such as taxes and interest payments.

Margin of Safety Percentage

A financial metric indicating the difference between actual sales and break-even sales, expressed as a percentage of actual sales.