The Price Elasticity of Supply for Milk in the Short

question 13

Multiple Choice

The price elasticity of supply for milk in the short run has been estimated to be 0.36, while the price elasticity of supply for milk in the long run is estimated to be 0.51.That means the supply of milk is:

• A) less elastic in the short run than in the long run.
• B) elastic in both the short run and the long run.
• C) relatively more elastic (that is, less inelastic) in the long run than in the short run.
• D) relatively less elastic (that is, more inelastic) in the long run than in the short run.

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Definitions:

Volume Variance

The difference between the budgeted fixed overhead and the applied fixed overhead, which is usually driven by a difference in actual production volume and the expected production volume.

Materials Price Variance

The variance between the real expense of materials and their anticipated (standard) price.

Raw Material

The basic substances or components that are processed or used in the manufacturing of goods.

Direct Labor-Hours

The cumulative number of labor hours directly engaged in manufacturing goods or services.