The Elasticity of Supply of Product X Is Unitary If

question 14

Multiple Choice

The elasticity of supply of product X is unitary if the price of X rises by

• A)5 percent and quantity supplied rises by 7 percent.
• B)8 percent and quantity supplied rises by 8 percent.
• C)10 percent and quantity supplied stays the same.
• D)7 percent and quantity supplied rises by 5 percent.

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Definitions:

Indirect Labor

Workers who support the production process but do not directly contribute to the manufacturing of the product, such as maintenance and supervisory staff.

Inventoriable Costs

Expenses directly tied to the production of goods, including materials and labor, capitalized as inventory until sold.

Direct Materials

Raw materials that are directly traceable to the manufacturing of products and significantly contribute to the product's cost.

Direct Labor

Direct labor costs are the wages and related expenses paid to employees who directly work on the production of goods or services.