If a 1 Percent Decrease in the Price of a Pound

question 455

Multiple Choice

If a 1 percent decrease in the price of a pound of oranges results in a smaller percentage decrease in the quantity supplied

• A) demand is elastic.
• B) demand is inelastic.
• C) supply is elastic.
• D) supply is inelastic.

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Definitions:

Fixed Cost Per Unit

The cost that remains constant in total but varies inversely with the level of production or sales volume.

Variable Cost

Costs that vary in direct relation to a business's operations, like expenses for raw materials or manufacturing supplies.

Activity Decreases

Reductions in the volume or intensity of activities, often leading to lower costs or changes in operational strategies.

Cost Estimation

The process of predicting the amount of resources, especially money, time, and labor, necessary to complete a project or produce a product.