If the Price Elasticity of Demand for a Good Is

question 199

Multiple Choice

If the price elasticity of demand for a good is 2.0,then a 10 percent increase in price results in a

• A)0.2 percent decrease in the quantity demanded.
• B)5 percent decrease in the quantity demanded.
• C)20 percent decrease in the quantity demanded.
• D)40 percent decrease in the quantity demanded.

---

Definitions:

Batches

Quantities of goods or materials processed or produced at one time during manufacturing.

Overhead Cost

Indirect expenses related to manufacturing or production, which are not directly tied to a specific product, such as rent, utilities, and salaries of managers.

Activity Rates

are used in activity-based costing to allocate costs to products or services based on specific activities requiring the costs, like inspection or setup.

Activity-Based Costing

An approach to costing that apportions overhead and indirect charges to particular activities, ensuring more accurate cost determinations for products or services.