Which Statement Is Correct

question 64

Multiple Choice

Which statement is correct?

• A)In a market system, buyers and sellers must be in face-to-face contact with each other.
• B)Prices affect the distribution of goods in a market system but not the allocation of resources.
• C)In a market system, prices serve to ration goods and services to consumers.
• D)The operation of a market system has little, if any, effect on the distribution of income in the economy.

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Definitions:

Fixed Overhead

Expenses that remain constant for a certain level of production or period of time, such as rent, salaries, and insurance, not directly tied to the level of production.

Work In Process

Inventory that includes goods partially through the production process but not yet complete.

Fixed Manufacturing Overhead

Indirect manufacturing costs that remain constant regardless of the level of production, such as rent, utilities, and salaries of managers.

Cost Of Goods Sold

The expenses directly related to the manufacturing of products a company sells, encompassing both materials and labor costs.