Which of the Following Describes the Difference Between the Demand

question 1

Multiple Choice

Which of the following describes the difference between the demand faced by a firm and the demand faced by an industry?

• A)The demand facing individual firms tend to be more price-elastic than those for the entire industry.
• B)The elasticity of demand for a firm and for an industry is the same.
• C)The demand facing individual firms tend to be less price-elastic than those for the entire industry.
• D)The income elasticity of demand faced by a firm is higher than the income elasticity of demand faced by an industry.

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Definitions:

Bottom-Up Budgeting

A budgeting method where the budget is created with input from lower-level employees, leading up to a total company budget.

Extrapolation

The process of estimating, beyond the original observation range, the value of a variable on the basis of its relationship with another variable.

Previous Year's Budget

The financial plan containing income and expenditure for the prior year, used as a reference or benchmark for current financial planning.

Forecasting

The process of predicting future events, trends, and behaviors based on historical data and analysis.