When a Demand Curve Is Linear

question 127

Multiple Choice

When a demand curve is linear:

• A) demand is elastic at low prices.
• B) demand is inelastic at low prices.
• C) demand is unitary elastic at low prices.
• D) the elasticity is constant at all prices.

---

Definitions:

Activity Variance

The difference between the budgeted amount of activity and the actual amount of activity.

Manufacturing Overhead

All manufacturing costs that are not direct materials or direct labor, including expenses such as rent, utilities, and equipment depreciation.

Cost Formula

An equation used to calculate the total costs involved in the production of goods or services, incorporating both fixed and variable components.

Flexible Budget

An adaptable budget that shifts based on variations in activity or volume.