If the Demand Curve in a Decreasing Cost Market Shifts

question 91

Multiple Choice

If the demand curve in a decreasing cost market shifts up and to the right, then:

• A)both the short run and long run prices stay the same.
• B)both the short run and long run prices increase.
• C)the short run price increases and the long run price decreases.
• D)both the short run and long run prices decrease.

---

Definitions:

Direct Labor Cost

An alternate term for direct labor, emphasizing the expense associated with the wages and benefits paid to production workers.

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured, including costs related to maintenance, utilities, and equipment depreciation.

Total Manufacturing Costs

The sum of all expenses related to the production of goods, including raw materials, labor, and overhead costs.

Manufacturing Overhead Applied

The allocation of manufacturing overhead costs to products based on a predetermined rate or activity base.