The Demand for Computers Has Risen Dramatically at the Same

question 194

Multiple Choice

The demand for computers has risen dramatically at the same time that the unit cost of production has decreased.As a result, we can expect

• A)a decrease in price and no predictable impact on output.
• B)a definite decrease in price and increase in output.
• C)an increase in output with no predictable change in price.
• D)no predictable changes in either price or output.

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Definitions:

Retained Earnings

The portion of a company's profit not distributed to shareholders as dividends but kept in the company to reinvest in its core business or to pay debt.

Cost Method

An accounting approach for investments, outlining that an investment is recorded at its acquisition cost, adjusting for any dividends received.

Deferred Tax Asset

An accounting term representing an asset that may be used to reduce any future tax liability originating from temporary timing differences between the accounting and tax treatment of transactions.

Deferred Tax Liability

Future tax obligations due to temporary differences between the accounting and tax treatment of transactions.