A Perfectly Horizontal Demand Curve Shows That the Own- Price

question 54

Multiple Choice

A perfectly horizontal demand curve shows that the own- price elasticity of demand is

• A) unity.
• B) less than one.
• C) zero.
• D) not defined.
• E) infinite.

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Definitions:

Standard Labor-Hours

The estimated time that should be required to complete a single unit of production, serving as a benchmark for performance and cost control.

Overhead

The indirect costs of production or operations that are not directly traceable to a specific product or job, such as utilities, rent, and administrative expenses.

Machine-Hours

A measure of production activity that quantifies the total hours a machine is operated over a specific period.

Fixed Manufacturing Overhead

Indirect production costs that remain constant regardless of the volume of production, such as salaries of managers and depreciation of factory equipment.