Demand Is Inelastic If

question 78

Multiple Choice

Demand is inelastic if

• A)the percentage change in quantity is greater than the percentage change in price.
• B)the elasticity of demand is less than 1.
• C)the demand for the good is sensitive to changes in price.
• D)more units will be purchased if the price increases.

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Definitions:

Unit Product Cost

The total cost (including materials, labor, and overhead) divided by the number of units produced.

Absorption Costing

A financial recording technique that incorporates every manufacturing expense, such as direct materials, direct labor, and all overhead costs (variable and fixed), into the product's cost.

Net Operating Income

The profit a company generates from its core business operations, excluding deductions of interest and tax.

Absorption Costing

An approach in accounting that integrates all costs associated with manufacturing, including direct materials, direct labor, and both variable and fixed overhead, into the product’s price.