The Demand for Movies Is Unit Elastic If

question 97

Multiple Choice

The demand for movies is unit elastic if

• A) a 5 per cent increase in the price leads to a 5 per cent decrease in the quantity demanded.
• B) any increase in the price leads to a 1 per cent decrease in the quantity demanded.
• C) a 5 per cent decrease in the price leads to an infinite increase in the quantity demanded.
• D) a 5 per cent increase in the price leads to a 5 per cent increase in total revenue.

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Definitions:

Activity-Based Costing

A costing methodology that assigns costs to products and services based on the activities that go into producing them, with the aim of providing more accurate product cost information.

Activity Drivers

Factors that cause changes in the costs of activities, used to allocate costs in activity-based costing accurately.

Direct Labor Hours

The total number of hours worked by employees directly involved in the production process of a company's goods or services.

Activity-Based Costing

A costing methodology that assigns costs to products or services based on the resources they consume, focusing on activities as the fundamental cost drivers.