Suppose That Supply for Some Good Increases and That Simultaneously

question 88

Multiple Choice

Suppose that supply for some good increases and that simultaneously the demand for the same good decreases. The result would be

• A)a decrease in P and an indeterminate change in Q.
• B)no change in either P or Q.
• C)an increase in Q and a decrease in P.
• D)a decrease in Q and an indeterminate change in P.
• E)an increase in Q and an increase in P.

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Definitions:

Full Costs

The complete cost of producing an item or providing a service, including direct, indirect, fixed, and variable costs.

Profitable

Describes a business or activity that generates more revenue than it spends in costs, resulting in a financial gain.

Variable Costing

A costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product costs.

Finished Goods Inventory

The completed products that are ready to be sold but have not been sold yet.