When an Input Represents a Small Proportion of a Firm's

question 262

Multiple Choice

When an input represents a small proportion of a firm's total costs, then

• A) demand for the input will tend to be less elastic.
• B) the input demand will vary significantly with a change in input price.
• C) the usage of the input cannot be varied in the production function.
• D) output demand will be highly elastic.

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Definitions:

Limited Liability

Refers to a legal structure where a company's owners are not personally liable for the company's debts or liabilities.

Sole Proprietorship

A business owned and operated by a single individual, where there is no legal distinction between the owner and the business entity.

Co-Operative

An organization owned and operated for the benefit of those using its services, with members sharing control according to democratic principles.

Distinct Legal Entity

This term refers to a business structure that is recognized as separate from its owners, having its own rights and liabilities.