question
Holding all other things constant, an increase in variable production costs will affect:
answer
the markup percentage under the absorption costing approach to cost-plus pricing
question
Holding all other things constant, an increase in how sensitive customers are to price would affect:
answer
the markup used to compute the profit-maximizing price
question
The price elasticity of demand is used in the absorption costing approach to cost-plus pricing to determine the markup over cost
answer
False
question
Demand for a product is said to be inelastic if a change in price has little effect on the number of units sold
answer
True
question
If a product is price inelastic, then a small change in selling price will result in a substantial change in the volume of units sold
answer
False
question
The dollar markup over cost under the absorption costing approach would increase if the unit product cost increases, holding everything else constant
answer
False
question
Holding all other things constant, if fixed costs increase, the profit-maximizing prize will:
answer
remain the same
question
Holding all other things constant, how will an increase in variable manufacturing costs affect the markup percentage using the absorption costing approach to pricing?
answer
decrease the markup percentge
question
Holding all other things constant, how will an increase in variable manufacturing costs affect the markup percentage using the economists approach to pricing?
answer
not change the markup percentage
question
The price elasticity of demand is used in the absorption costing approach pricing to determine the markup over cost
answer
False
question
Using the economists' approach to pricing and holding all other things constant, a change in the elasticity of demand from -2.5 to -3.0 will decrease the dollar markup
answer
True
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