Demand for a Product Is Likely to Be More Price

question 175

Multiple Choice

Demand for a product is likely to be more price elastic if:

• A)it has few substitutes.
• B)its price is low relative to a product with which it must be used.
• C)it is considered a necessity.
• D)it has many substitutes.

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Definitions:

Selling Price

The amount of money charged for a product or service, determined by factors such as cost, market demand, and competition.

Unit Product Costs

Unit product costs are the total expenses incurred in producing a single unit of product, including direct materials, direct labor, and manufacturing overhead, crucial for pricing and profitability analyses.

Markup

The difference between the cost of a good or service and its selling price, expressed as a percentage of the cost.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate overhead costs to products or cost objects based on a planned activity level.