Figure 6-7 -Refer to Figure 6-7.Using the Total Revenue Test to Verify

question 95

Multiple Choice

Figure 6-7

-Refer to Figure 6-7.Using the total revenue test to verify the price elasticity between points a and b on the demand curve, demand is

• A)perfectly inelastic.
• B)unit-elastic.
• C)perfectly elastic.
• D)elastic.

---

Definitions:

Fixed Expenses

Expenses that remain constant regardless of the level of production or sales, including rent, salaries, and insurance premiums.

Cash Receipts

The total amount of money, including cash, checks, and credit card payments, received by a business during a given period.

Credit Sales

Transactions where goods or services are provided to a customer with the agreement that payment will be made at a future date.

Selling and Administrative

Expenses associated with the company's efforts to sell its products and manage the overall organization, excluding production costs.