The Demand for a Product Is Inelastic with Respect to Price

question 145

Multiple Choice

The demand for a product is inelastic with respect to price if

• A)consumers are largely unresponsive to a per unit price change.
• B)the elasticity coefficient is greater than 1.
• C)a drop in price is accompanied by a decrease in the quantity demanded.
• D)a drop in price is accompanied by an increase in the quantity demanded.

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Definitions:

Direct Labor

The cost of wages for employees who are directly involved in producing goods or providing services.

Direct Materials Inventory

Raw materials that are directly traceable to the manufacturing of products and are considered part of the inventory assets on the balance sheet.

Direct Materials Budget

A financial plan that estimates the raw materials needed for production and their expected costs.

Cost per Pound

A measurement of the cost to produce, acquire, or create one pound of a product or material.