Exhibit 5-1 Demand Curve

question 59

Multiple Choice

Exhibit 5-1 Demand curve

If demand price elasticity is 2, consumers would:

• A) buy twice as much of the product in response to a 10 percent decrease in prie.
• B) require a 2 percent drop in price to increase their purchases by 1 percent.
• C) buy 2 percent more of the product in response to a 1 percent decrease in price.
• D) buy twice as much of the product in response to a 1 percent decrease in price.

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Definitions:

Variable Electric Power

Electricity supply or rate that can fluctuate based on demand or time of use, often tied to renewable energy sources.

Fixed Costs

Expenses that do not change in proportion to the activity of a business.

Finished Goods Inventory

The direct materials costs, direct labor costs, and factory overhead costs of finished products that have not been sold.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials, labor, and overhead expenses.