Use the Following to Answer Question(s): Demand and Price Elasticity

question 159

Multiple Choice

Use the following to answer question(s) : Demand and Price Elasticity 2

-(Exhibit: Demand and Price Elasticity 2) The price elasticity of demand between points A and B is:

• A) elastic, since total revenue falls when price falls from $8 to $6.
• B) elastic, since total revenue increases when price falls from $8 to $6.
• C) inelastic, since the percentage change in quantity is less than the percentage change in price when price falls from $8 to $6.
• D) positive, because the slope is negative.

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Definitions:

Weighted Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all units available for sale during the period.

Equivalent Units

A concept in cost accounting used to compute the costs associated with partially completed goods.

Welding Department

A specialized division within a manufacturing or engineering company focused on joining metal parts through the application of heat.

Weighted-Average Method

The weighted-average method calculates the cost of goods sold and ending inventory value, considering the average cost of all inventory items based on weight.