A Demand Curve

question 250

Multiple Choice

A demand curve

• A) has an upward slope.
• B) has a downward slope.
• C) is a graph of the relationship between quantity demanded of a good and its price.
• D) Both answers B and C are correct.
• E) Both answers A and C are correct.

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Definitions:

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, including items like rent, salaries, and insurance fees.

Variable Costs

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

Financial Leverage

Utilizing borrowed capital to amplify the possible returns on an investment.

Operating Leverage

An indicator of the degree to which sales growth affects operational profit, showing the ratio of a company's fixed costs compared to its variable costs.