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Suppose When the Price of Jean-Jackets Increased by 10 Percent

question 165

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Suppose when the price of jean-jackets increased by 10 percent, the quantity supplied increased by 16 percent.Based on this information the price elasticity of supply of jean-jackets is


Definitions:

Variable Cost

Costs that change in proportion to the level of activity or volume of production in a company.

Absorption Costing

The reporting of the costs of manufactured products, normally direct materials, direct labor, and factory overhead, as product costs.

Operating Leverage

Operating leverage describes the extent to which a company can increase its profits by increasing sales, highlighting the fixed versus variable costs structure.

Operating Income

A metric that calculates the profits realized from a business's core operations, excluding deductions of interest and taxes.

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