If the Demand for Electricity Is Price Inelastic, One Can

question 116

True/False

If the demand for electricity is price inelastic, one can conclude that the demand for the engineers and technicians working on the electric grid is sensitive to the wage rate of these workers.

---

Definitions:

Break-even Point

The level of sales or production at which total revenues equal total expenses, resulting in neither profit nor loss.

Variable Expenses

Costs that vary directly with the level of output or activity, such as materials and labor.

Operating Income

The profit realized from a business's operations after subtracting operating expenses from the gross profit.

Contribution Format

An income statement format that separates fixed and variable costs to highlight the contribution margin.