When the Price of a Product Is Increases by 15

question 135

Multiple Choice

When the price of a product is increases by 15 percent, the quantity demanded decreases by 10 percent. We can therefore conclude that the demand for this product is

• A) elastic.
• B) inelastic.
• C) cross-elastic.
• D) unitary elastic.

Recognize the importance of quality control costs in a lean environment.

Identify the application of lean practices to service industries and administrative processes.

Understand the principles and objectives of lean manufacturing.

Recognize the differences between lean and traditional manufacturing environments.

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Definitions:

Double-Declining-Balance Method

A method of accelerated depreciation that doubles the rate at which an asset's book value depreciates.

Salvage Value

The projected amount an asset is expected to yield when it is sold after its period of usability has ended.

Book Value

The value of an asset according to its balance sheet account balance, which accounts for the cost of the asset minus any depreciation, amortization, or impairment costs.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal installments.