-Consider the Figure Above Showing Supply Curves for Soft Drinks

question 493

Multiple Choice

-Consider the figure above showing supply curves for soft drinks. Suppose the economy is at point
A. An increase in the price of a soft drink is shown as a movement from point a to

• A) none of the points that are illustrated.
• B) point b.
• C) point c.
• D) point d.

---

Definitions:

Fixed Expenses

Regular and unchanged expenses incurred by a business irrespective of its level of output or sales volume, such as lease payments, insurance, and salaries of permanent employees.

Theory of Constraints

A management paradigm that focuses on identifying and addressing the single bottleneck or constraint that severely limits a system's performance or output.

Bottlenecks

Refer to points of congestion in a production system that significantly slow down the overall process.

Variable Cost Concept

A concept used in applying the cost-plus approach to product pricing in which only the variable costs are included in the cost amount to which the markup is added.