When the Demand for a Product Is Less Elastic Than

question 207

Multiple Choice

When the demand for a product is less elastic than the supply,

• A)consumers pay the majority of the tax on the product.
• B)firms pay the majority of the tax on the product.
• C)firms pay the entire tax on the product.
• D)consumers pay the entire tax on the product.

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Definitions:

Variable Overhead

Costs that vary with production volume, such as supplies and utilities for manufacturing.

Rate Variance

The difference between the actual rate of expense or income and its expected (standard) rate, often used in variance analysis.

Direct Labor-Hours

The cumulative hours employees directly participating in the production process have worked.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost of materials.