If Pacific Power and Light Increased Its Rates by 10

question 12

Multiple Choice

If Pacific Power and Light increased its rates by 10 percent and experienced a 2 percent reduction in the demand for power, the demand would be

• A)elastic.
• B)minimal.
• C)minor elasticity.
• D)variable.
• E)inelastic.

---

Definitions:

Direct Materials

Raw materials directly attributed to the production of goods.

Conversion Costs

Costs in manufacturing that include both direct labor and overhead costs, specifically associated with the conversion of raw materials into finished goods.

Direct Materials

Raw materials that are directly traceable to the production of specific goods or services.

Factory Overhead

All indirect costs associated with manufacturing, such as utilities, depreciation, and maintenance, not directly tied to production.