Calling Long Distance Is Often More Expensive on Weekdays Between

question 221

Multiple Choice

Calling long distance is often more expensive on weekdays between 8 am and 5 pm than in the evening hours.Why is this the case?

• A)Telephone companies hope to discourage customers from calling long distance during the day to keep their labor costs down.
• B)The cost of making long-distance connections is higher during the day than in the evenings.
• C)Businesses who must call suppliers or customers during business hours have few alternatives and therefore have an inelastic demand during the workday compared to after-work hours.
• D)Increasingly, businesses who must call suppliers or customers during business hours resort to the internet, thereby reducing demand for long-distance calls. To make up for this fall in demand, telephone companies charge higher rates.

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Definitions:

Amount Collected

The total money received or gathered from various sources, such as payments or sales.

Direct Materials Purchases

The acquisition of raw materials that are directly incorporated into a finished product during the manufacturing process.

Budgeted Cash Disbursements

An estimation of all cash payments that a business expects to make over a specified period, often part of a cash flow forecast or budget.

Wages Expense

The total amount of monetary compensation paid to employees for services rendered during a specific period.