Suppose, as a Result of a Long-Run Adjustment in a Perfectly

question 180

Multiple Choice

Suppose, as a result of a long-run adjustment in a perfectly competitive industry to a change in demand, price and output both rose.Therefore, demand must have __________ in this __________ industry

• A)fallen; increasing cost
• B)fallen; decreasing cost
• C)increased; increasing cost
• D)increased; decreasing cost
• E)decreased; constant cost

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Definitions:

Manufacturing Overhead Cost

Every cost linked to the production process that is not direct materials or direct labor expenses.

Employee Time Ticket

A record that details the amount of time an employee spends on different tasks or projects, used for payroll or costing purposes.

Vacation Travel

encompasses both the planning and actual experience of personal travel for leisure or recreation purposes.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both fixed and variable manufacturing overhead - in the cost of a product.