There Is a Decrease in Prices Due to Oversupply of Goods

question 49

Multiple Choice

There is a decrease in prices due to oversupply of goods and services compared to the amount of money available to purchase them when the money supply does which of the following?

• A) is shrinking
• B) grows slow and steady
• C) is stagnant
• D) grows too quickly

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Definitions:

Variable Expenses

Costs that change in proportion to the level of production or sales activities.

Break-even Point

The point at which total revenue equals total costs, resulting in neither profit nor loss for the business.

Unit Variable Cost

The cost associated with producing one additional unit of a product, which varies directly with the level of production output.

Variable Expenses

Costs that vary directly and proportionately with the level of production activity or business volume.