-In the Above Figure, If the Price Is P₁ and

question 328

Multiple Choice

-In the above figure, if the price is P₁ and the firm produced Q₃, the firm's economic profit is ________ than if it produced Q₁ and ________ than if it produced Q₂.

• A) less; less
• B) less; more
• C) more; less
• D) more; more

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Definitions:

Standard Price

The predetermined cost of a single unit of input, such as materials or labor, used in standard costing practices.

Direct Labour

The labor costs for employees directly involved in the production of goods or services.

Actual Hours

The real number of hours worked, as opposed to the planned or standard hours set for a job or task.

Materials Price Variance

The difference between the actual cost of materials purchased and the expected (or standard) cost, multiplied by the quantity of materials purchased.