Match the term with its definition.
-The degree to which a change in price affects the quantity demanded
A)aging schedule
B)bad-debt ratio
C)break-even analysis
D)break-even point
E)contribution margin
F)elastic demand
G)elasticity of demand
H)inelastic demand
I)price

Question

Quizplus · Accepted Answer

Elasticity of demand measures how much the quantity demanded changes in response to a change in price.

Answer: F
 Elastic demand occurs when a small change in price leads to a significant change in the quantity demanded.

Answer: H
 Inelastic demand occurs when a change in price has little effect on the quantity demanded.

Answer: I
 Price is the amount of money charged for a product or service.

Answer: C
 Break-even analysis is a calculation that helps determine the minimum amount of sales needed to cover all costs and reach profitability.

Answer: D
 Break-even point is the level of sales at which revenue equals total costs and there is neither a profit nor a loss.

Answer: E
 Contribution margin is the difference between the price of a product and the variable costs associated with producing it.

Answer: A
 An aging schedule is a report that shows how long accounts receivable have been outstanding and helps companies identify overdue accounts.

Answer: B
 The bad-debt ratio measures the percentage of accounts receivable that are expected to be uncollectible and represents a loss for the company.

Match the Term with Its Definition