A Surplus Exists in the Market When

question 74

Multiple Choice

A surplus exists in the market when

• A)the quantity demanded exceeds the quantity supplied.
• B)supply and demand are equal.
• C)the quantity demanded is less than the quantity supplied.
• D)the supply curve has shifted to the left.
• E)the equilibrium price is too low.

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Definitions:

Absorption Costing

Absorption costing is an accounting method that includes all of the manufacturing costs (direct materials, direct labor, and overhead) in the cost of a product.

Variable Costing

An accounting method that only considers variable costs in the cost of goods sold and is used in internal financial analysis.

Income Statement

A financial document that shows a company's revenues, expenses, and net income over a specific period.

Unit Product Cost

The total cost associated with producing one unit of product, including materials, labor, and overhead.