Which of the following occurs when price is inelastic?
A) Price and revenue change in the same direction.
B) Revenues decrease when price increases.
C) Revenue is unaffected by price changes.
D) Quantity demanded increases when price increases.
E) The demand curve is more horizontal.
A
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Which of the following is a consistently desirable characteristic in a transfer pricing system?
a. system is very complex to be the most fair to the buying and selling units b. effect on subunit performance measures is not easily determined c. system should reflect organizational goals d. transfer price remains constant for a period of at least two years
A favorable cost variance occurs when
A) Actual costs are more than standard costs. B) Standard costs are more than actual costs. C) Standard costs are less than actual costs. D) None of the above.
When consumer demandis sensitive to price changes, _____ occurs
a. inelastic demand b. sales maximization c. elastic demand d. profit maximization
Olive Corp. currently makes 20,000 subcomponents a year in one of its factories. The unit costs to produce are: Per unitDirect materials $12Direct labor 8Variable manufacturing overhead 12Fixed manufacturing overhead 8Total unit cost $40An outside supplier has offered to provide Olive Corp. with the 20,000 subcomponents at a $36 per unit price. Fixed overhead is not avoidable. If Olive Corp. accepts the outside offer, what will be the effect on short-term profits?
A. $80,000 decrease B. $160,000 decrease C. $160,000 increase D. $320,000 increase