For a Good That Is a Necessity

question 130

Multiple Choice

For a good that is a necessity,

• A)quantity demanded tends to respond substantially to a change in price.
• B)demand tends to be inelastic.
• C)the law of demand does not apply.
• D)All of the above are correct.

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Definitions:

Holding Cost Rate

The percentage of the value of inventory held over a certain period of time as costs, including storage, insurance, and depreciation.

Economical

Characterized by efficiency and avoidance of waste, referring to the cost-effective allocation and use of resources.

Keiretsu

A closely linked alliance of businesses in Japan, often including manufacturers and suppliers, which cooperate to ensure mutual success.

Net Profit Margin

A financial metric that calculates the percentage of net profits earned with respect to sales revenue, indicating the efficiency of a company in converting sales into actual profits.