Which of the Following Is the Best Example of a Discretionary

question 49

Multiple Choice

Which of the following is the best example of a discretionary fixed cost?

• A) advertising
• B) factory rent
• C) direct materials
• D) factory insurance

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Definitions:

Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in its price, indicating the sensitivity of consumers to price changes.

Advertisers

Entities that promote goods, services, or ideas through various media to persuade potential customers to respond or buy.

Brand Loyalty

The tendency of consumers to continuously purchase one brand's products over another, reflecting a preference based on perception of the brand's value.

Elastic

Describes a situation in economics where the quantity demanded or supplied of a good changes significantly in response to a change in price.