If the Elasticity of Demand Is 3,and the Price Rises

question 107

Multiple Choice

If the elasticity of demand is 3,and the price rises by 15 percent,then

• A)The quantity demanded will increase by 5 percent.
• B)The quantity demanded will fall by 45 percent.
• C)The quantity demanded will rise by 4.5 percent.
• D)The percentage change in quantity demanded will fall as income rises.

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Definitions:

Milling

A machining process that involves the cutting and shaping of materials using a rotating tool, commonly used in manufacturing to create parts of precise shapes and sizes.

Finishing

The final step in the manufacturing process where a product undergoes final touch-ups, coating, polishing, or packaging.

Predetermined Overhead Rate

A rate calculated before a period begins, based on the estimated overhead costs and estimated activity base, used to allocate overhead to products or services.

Machine-Hours

A unit of measure indicating the operational time of machines in manufacturing processes, key to determining overhead rates and productivity.