For a Good That Is a Necessity,demand

question 134

Multiple Choice

For a good that is a necessity,demand

• A)tends to be inelastic.
• B)tends to be elastic.
• C)has unit elasticity.
• D)cannot be represented by a demand curve in the usual way.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after all variable expenses have been deducted, indicating how much contribution towards covering fixed costs and generating profit.

Variable Costs

Expenses that vary directly with the level of production or sales volume.

Selling Price

The price at which a product or service is offered for sale to consumers.

Gross Margin

The difference between sales revenue and the cost of goods sold, indicating the profitability of a company's core activities.