There Is a Surplus in a Market for a Product

question 231

Multiple Choice

There is a surplus in a market for a product when:

• A)the decrease in supply is greater than the increase in demand.
• B)the increase in demand is greater than the decrease in supply.
• C)quantity supplied is less than quantity demanded.
• D)quantity demanded is less than quantity supplied.

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Definitions:

Variable

A quantity that can change or vary, often used in mathematics and statistics to represent an element that can assume different values.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, influenced by the proportion of fixed to variable costs.

Fixed Costs

Fixed Costs are business expenses that remain constant regardless of the level of production or sales activity, such as rent, salaries, and insurance.

Profit-volume Chart

A Profit-Volume Chart is a graphical representation that shows the relationship between a firm's profits and its volume of sales, illustrating the impact of different sales levels on profits.