A Fall in the Price of Potatoes, Which Are Used

question 1

Multiple Choice

A fall in the price of potatoes, which are used in the production of french fries, will

• A)lead to an increase in the supply of french fries, causing the supply curve of french fries to shift to the right.
• B)lead to a decrease in the supply of french fries, causing the supply curve of french fries to shift to the left.
• C)have no effect on the supply of french fries but cause a movement along the supply curve of french fries.
• D)have no effect on the supply of french fries.
• E)lead to a decrease in the demand for french fries.

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Definitions:

Unit

A single, distinct item or entity that is a part of a larger group, system, or measure.

Break-Even Point

The point where the amount of goods produced or sold matches the total costs, leading to neither profit nor loss.

Contribution Format

An income statement format that separates fixed and variable costs, making it easier to see the contribution margin.

Income Statement

A report that outlines the financial results of a business, including its income, expenditures, and net profits or losses, for a defined accounting period.