If the Demand for a Good Is Price Inelastic and the Good

question 13

Multiple Choice

If the demand for a good is price inelastic and the good price is increased,then the marginal revenue (MR) received by the seller will

• A)not change.
• B)decrease.
• C)increase.
• D)Cannot be determined from this information

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Definitions:

Direct Fixed Expenses

Costs that are directly associated with a specific department or segment of a business and do not vary with the level of production or sales.

Cash Flow

The aggregate money movement into and out of a company, notably impacting its cash on hand.

Excess Capacity

The availability of more production capacity within a business than is currently needed to meet demand.

Special Order

An order for a product or service that is outside the company's normal scope of work, often requiring a unique set of costs and pricing.