If the Price of Apples Increases, Total Expenditures on Apples

question 112

Multiple Choice

If the price of apples increases, total expenditures on apples will decline if

• A) there are few substitutes for apples.
• B) the supply of apples is inelastic.
• C) the demand for apples is elastic.
• D) apples are a normal good.

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Definitions:

Idle Capacity

The portion of a company's resources or production ability that is not being used in production but still incurs costs.

Special Order

A customer order that is outside the normal scope of company offerings, often requiring unique specifications, pricing, or production processes.

Fixed Manufacturing Cost

Costs that do not vary with the level of manufacturing output, including rent, salaries of permanent staff, and depreciation of factory equipment.

Modify

Alteration or adjustment to change an existing condition or set of properties.