If the Value of Price Elasticity of Demand Is 0

question 96

Multiple Choice

If the value of price elasticity of demand is 0.2,it implies that a 1 percent increase in price leads to a:

• A)2 percent decrease in quantity demanded.
• B)2 percent increase in quantity demanded.
• C)0.2 percent decrease in quantity demanded.
• D)0.2 percent increase in quantity demanded.

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Definitions:

Labor Efficiency Variance

The difference between the actual labor hours taken to produce something and the standard labor hours expected, multiplied by the labor rate.

Direct Labor

The wages and salaries for workers who are directly involved in the production of goods.

Raw Materials

The basic materials and substances used in the initial stages of production to manufacture goods.

Standard Costs

Predicted costs associated with manufacturing or providing a service, used for budgetary control and performance analysis.