Petrol Has Inelastic Price Elasticity of Demand in Both Short

question 28

Multiple Choice

Petrol has inelastic price elasticity of demand in both short and long run but chinaware has elastic price elasticity of demand in both short and long run because:

• A)petrol is more important than chinaware.
• B)petrol is a necessity and chinaware is a luxury.
• C)petrol cannot be compared to chinaware.
• D)petrol is a luxury and chinaware is a necessity.

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Definitions:

Plantwide Predetermined

A rate, often related to overhead costs, that is set before the accounting period begins and applied uniformly throughout an entire plant or organization.

Machine-Hours

A measure of production output or activity level using the total hours machines are operated.

Plantwide Predetermined

A uniform overhead rate used across an entire plant or factory, calculated by dividing estimated overhead costs by an estimated allocation base like labor hours or machine hours.

Machine-Hours

An operating measure that quantifies the amount of time production equipment is utilized in the manufacture of goods.