What Is the Focus of Cost Behaviour Analysis

question 27

Multiple Choice

What is the focus of cost behaviour analysis?

• A) the reaction of costs to changes in time
• B) the reaction of costs to changes in profit
• C) the reaction of costs to changes in benefit
• D) the reaction of costs to changes in activity level

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Definitions:

Cross-Price Elasticity

A measure used in economics to show how the quantity demanded of one good changes in response to a change in the price of another good.

Inferior Goods

Goods for which demand decreases as the income of the consumer increases, opposite to normal goods.

Normal Goods

Goods for which demand increases as consumers' income increases, holding all other factors constant.

Cross-Price Elasticity

A measure of how the quantity demanded of one good changes in response to a price change of another good.