If an Increase in the Price of a Product from $1

question 58

Multiple Choice

If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then the value of price elasticity of demand is

• A)-1/3
• B)-2 1/3
• C)-1/4
• D)-3
• E)-2/3

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Definitions:

Raw Materials Used

The basic substances in their natural, modified, or semi-processed state used as inputs for production.

Average Inventory

The mean value of inventory within a certain period, calculated by adding the beginning inventory and ending inventory and dividing by two.

Direct Labor

The labor cost directly associated with the production of goods, including wages for workers who physically convert materials into the finished product.

Raw Materials

The basic materials from which products are made, typically not yet processed or used in manufacturing.