When the Demand Curve Shifts to the Right and the Supply

question 146

Multiple Choice

When the demand curve shifts to the right and the supply curve is held constant,

• A) the equilibrium price and quantity decrease.
• B) the equilibrium price increases and the equilibrium quantity decreases.
• C) the equilibrium price decreases and the equilibrium quantity increases.
• D) the equilibrium price and quantity increase.
• E) one can see a movement along the demand curve.

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Definitions:

Direct Labor Hours

Direct Labor Hours refer to the amount of time spent by workers directly involved in the production of goods or services, used as a basis for allocating labor costs to products.

Factory Overhead Costs

Expenses related to the day-to-day operations of a factory that are not directly tied to a specific product, such as utilities, depreciation, and maintenance.

Period Costs

Expenses that are recognized in the income statement when incurred, instead of being tied to inventory, include utilities and rent for office space.

Selling Expenses

Costs incurred directly and indirectly in selling products or services, including advertising, sales staff salaries, and commission.