Which of the Following Is Likely to Be True of a Product

question 87

Multiple Choice

Which of the following is likely to be true of a product that has a large number of substitutes?

• A) Its income elasticity is likely to be zero.
• B) It is likely to be highly price elastic.
• C) It will be highly valued because of its exclusivity.
• D) Its cost of production is likely to be low.

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Definitions:

Fixed Costs

Expenses that do not change with the level of goods or services produced by the business.

Sales Mix

The composition of a company's various product or service offerings and their relative contributions to overall sales and profitability.

Unit Price

The cost per single item or measure, which allows for the comparison of costs among different units.

Fixed Costs

Costs that do not fluctuate with the volume of production or sales, such as rent, salaries, and insurance.