Exhibit 39-6 -Refer to Exhibit 39-6.A Major Change in Weather Conditions Favorable

question 74

Multiple Choice

Exhibit 39-6

-Refer to Exhibit 39-6.A major change in weather conditions favorable to the production of X will shift the supply curve for X from its original position.The consequent change in price and total revenue would be less sharp if the demand curve for X is __________ because it is __________ over the relevant region.

• A) D1; more elastic than D2
• B) D1; more inelastic than D2
• C) D2; more elastic than D1
• D) D2; more inelastic than D1

---

Definitions:

Product Costs

Encompasses all costs incurred to create a product, including direct materials, direct labor, and manufacturing overhead.

Direct Labor

The expenses related to the salaries of workers who are actively engaged in creating products or providing services.

Direct Materials

Raw materials that are directly involved in the production of a product and can be easily traced to it.

Cost Pool

A collection of indirect costs grouped together based on similar cost drivers for the purpose of allocation to products, services, or departments.