Answer:
Elasticity
Explanation:
Elasticity of supply is a measure of the way suppliers respond to a change in price.
Good Luck!
Answer:
Management Level
Explanation:
A cost allocation method is not an activity based costing typically.
Interviews with management that have adequate knowledge and the cost classification are usually done at management level
E S ( elasticity of supply ) = .5 ( supply is inelastic: E S < 1 )
The formula is:
E S = Δ Q / Δ P * P / Q,
where: Δ Q is the change in quantity, Δ P is change in price, P is initial price and Q is initial quantity.
.5 = Δ Q / 25 * 50 / 100,000
Δ Q = .5 * 25 * 100,000 / 5
Δ Q = 25,000
Quantity at the new price: Q ( new ) = 100,000 + 25,000 = 125,000
Answer: option C.
It corrects the error in the original because when business seek to reduce cost cut positions not the contrary. The employment goes down which is the same that unemployment goes up.
