If a Large Percentage Increase in the Price of a Good

question 64

Multiple Choice

If a large percentage increase in the price of a good results in a small percentage reduction in the quantity demanded of the good, demand is said to be

• A) horizontal.
• B) relatively inelastic.
• C) relatively elastic.
• D) income proof.

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Definitions:

Volume Variance

A measurement of the difference between the expected volume of production and the actual volume produced, impacting costs.

Cost

The expenditure incurred by a business to produce, acquire, or maintain a good or service.

Overhead Costs

Expenses related to the operation of a business that cannot be directly attributed to a specific product or service.

Fixed Manufacturing Overhead

Costs related to manufacturing that remain constant regardless of the level of production or sales.