If a Product Has a Short-Run Elasticity of Supply Equal

question 352

Multiple Choice

If a product has a short-run elasticity of supply equal to zero, then an increase in the demand for the product will

• A)have no effect on price or quantity sold.
• B)increase price and leave quantity sold unchanged.
• C)increase price and reduce the quantity sold to zero.
• D)leave the price unchanged and reduce the quantity sold.

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Definitions:

Cost Per Equivalent Unit

A calculation used in process costing that represents the cost of a completed unit, taking into account both completed and partially completed units.

Conversion Costs

The combined costs of labor and overhead that are required to transform raw materials into finished products.

Cost Per Equivalent Unit

Calculation of the cost to produce a single unit, taking into account units that are partially completed; particularly useful in process costing systems.

Processing Department

A unit or stage within a manufacturing operation where a particular process or set of processes is performed, transforming raw materials into finished products.