If the Price Elasticity of Demand Is Less Than 1

question 184

Multiple Choice

If the price elasticity of demand is less than 1, then consumer demand is

• A) unrelated to the elasticity of demand.
• B) inelastic.
• C) elastic.
• D) unitary elastic.

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Definitions:

Throughput

The rate at which goods or services are produced or processed in a system.

Break-Even Analysis

A means of finding the point, in dollars and units, at which costs equal revenues.

Variable Costs

Costs that vary directly with the level of production or business activity, such as materials and labor.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance.