A Good That Has Highly Elastic Demand Is Most Likely

question 23

Multiple Choice

A good that has highly elastic demand is most likely to:

• A) have a large number of substitutes.
• B) be purchased by low-income consumers.
• C) be sold at a high price level.
• D) be produced by a single firm.
• E) be a necessary good.

---

Definitions:

Manufacturing Cost

The total expense incurred in the production of goods, including raw materials, labor, and overhead.

Predetermined Overhead Rates

Estimated overhead rates used to assign manufacturing overhead costs to products based on a pre-defined basis such as machine hours or labor hours.

Machine-Hours

A measure of the amount of time a machine is operated, used as a basis for allocating overhead costs in manufacturing.

Forming

The process of shaping material into a desired geometry, often through methods like forging, molding, or casting.