Which One of the Following Generalizations Is NOT Correct

question 129

Multiple Choice

Which one of the following generalizations is NOT correct?

• A) The demand for luxury goods is relatively elastic.
• B) The demand for necessities is relatively elastic.
• C) The greater the availability of substitutes,the higher the price elasticity of demand.
• D) The higher the price of an item is as compared to a consumer's income the higher the elasticity of demanD.

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Definitions:

Contribution Margin

The amount left from sales revenue after variable costs are subtracted, contributing to covering fixed costs and generating profit.

Merchandising Company

Businesses that buy finished goods and sell them at a profit without modifying the product, focusing on distribution rather than production.

Sales Revenue

The income generated from the sale of goods or services before any costs or expenses are deducted.

Relevant Range

The scope of operations within which the assumptions regarding the behavior of variable and fixed costs hold true.