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If Both Demand and Supply Decrease, but the Decrease in Demand

question 70

Multiple Choice

If both demand and supply decrease, but the decrease in demand is greater than the decrease in supply, then the equilibrium price _____ and equilibrium output _____.


Definitions:

Standard Costs

Predetermined costs calculated for direct materials, labor, and overhead, used as a benchmark to measure performance.

Actual Costs

The real expenses incurred in the production of goods or services, as opposed to estimated or budgeted costs.

Fixed Factory Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs, attributable to changes in production volume.

Standard Factory Overhead Rate

A predetermined rate used to assign manufacturing overhead costs to individual units of output on a consistent basis.

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