Which of the Following Is Likely to Increase the Elasticity

question 48

Multiple Choice

Which of the following is likely to increase the elasticity of demand for a good?

• A)A decrease in the availability of close substitutes.
• B)A longer period of time.
• C)A smaller share of income designated for the good in question.
• D)A decrease in the price.

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Definitions:

Standard Direct Materials Price

The pre-determined cost per unit of raw materials expected to be incurred, utilized in budgeting and variance analysis.

Receiving Costs

Expenses associated with the reception of materials or goods from suppliers, including inspection, storage, and handling fees.

Freight Costs

Expenses associated with transporting goods from one location to another, which can include shipping, handling, and insurance fees.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard expected quantity, multiplied by the standard cost per unit.