If the Demand for Alarm Clocks Decreases,the Effect on the Alarm

question 15

Multiple Choice

If the demand for alarm clocks decreases,the effect on the alarm clock job market will be to

• A)Increase the demand for labor and increase equilibrium wages.
• B)Reduce the supply of labor and increase equilibrium wages.
• C)Decrease the demand for labor and reduce equilibrium wages.
• D)Have no impact on equilibrium wages.

---

Definitions:

Contribution Margin

The difference between the sales revenue and variable costs of a product, showing how much revenue contributes towards covering fixed costs and generating profit.

Avoidable Costs

Expenses that can be eliminated if a particular decision is made or if an activity is ceased.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and should not affect future business decisions.

Irrelevant Costs

Costs that will not be affected by a decision and should not be considered when making that decision.