When the Price of a Product Is Increases by 15

question 135

Multiple Choice

When the price of a product is increases by 15 percent, the quantity demanded decreases by 10 percent. We can therefore conclude that the demand for this product is

• A) elastic.
• B) inelastic.
• C) cross-elastic.
• D) unitary elastic.

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Definitions:

Square Feet

A unit of area measurement equal to a square that measures one foot on each side, commonly used in the United States.

Spending Variance

is the difference between the actual amount spent on materials, labor, or overhead and the budgeted amount for these items.

Fixed Cost

An expense that remains constant, irrespective of the volume of products or services manufactured or traded.

Variable Cost

Costs that vary directly with the level of production or output.