When Total Production Is Greater Than Total Expenditures

question 165

Multiple Choice

When total production is greater than total expenditures,

• A) the economy is in disequilibrium.
• B) there are increases in inventory.
• C) total output will decrease.
• D) all of the above

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Definitions:

Relevant Range

The range of activity within which the assumptions made about cost behavior in cost-volume-profit analysis are valid.

Cost Estimates

A predictive calculation of the anticipated expenses for a project or production, used for budgeting and planning purposes.

Marginal Cost

The cost of producing one additional unit of a product or service.

Relevant Range

The range of activity or volume in which the assumptions about fixed costs and variable costs are valid.