Consumers Regard Dell Computers and Apple Computers as Substitutes

question 15

Multiple Choice

Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the

• A) demand for Apple computers decreases.
• B) demand for Dell computers increases.
• C) supply of Dell computers increases.
• D) demand for Apple computers increases.
• E) demand for Dell computers decreases.

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Definitions:

Absorption Costing

An accounting method where all manufacturing costs, both fixed and variable, are attributed to the production of products.

Variable Costing

A costing method in which variable manufacturing costs are included in product costs, while fixed manufacturing costs are treated as period costs.

Absorption Costing

An accounting method that assigns all manufacturing costs, both variable and fixed, to products, thereby impacting the inventory valuation on the balance sheet.

Net Operating Income

The profit a company makes from its operations, calculated as total revenue minus operating expenses, excluding taxes and interest.