If Demand Decreases and Supply Increases, Price Will

question 62

Multiple Choice

If demand decreases and supply increases, price will

• A)always increase
• B)always decrease
• C)increase only if supply increases more than demand decreases
• D)increase only if supply increases less than demand decreases
• E)decrease only if supply increases more than demand decreases

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Definitions:

Finishing Department

The last phase in the manufacturing process where products are completed, polished, inspected, and prepared for sale or shipment.

First-In, First-Out

An inventory valuation method where the goods first purchased or produced are the first ones sold, assuming that older inventory is used up first.

Equivalent Units

A concept in cost accounting used to allocate costs to mass-produced items that are not identical, allowing for the calculation of per-unit costs at various stages of production.

Conversion Cost

The total cost of converting raw materials into finished goods, comprising both direct labor costs and manufacturing overhead costs.