Costs That Will Differ Between Alternatives and Influence the Outcome

question 126

Multiple Choice

Costs that will differ between alternatives and influence the outcome of a decision are

• A) sunk costs.
• B) unavoidable costs.
• C) relevant costs.
• D) product costs.

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Definitions:

Demand

The willingness and ability of consumers to purchase goods or services at a given price level.

Supply

The complete quantity of a product or service that can be bought at a particular price point.

Price Floor

A legally established minimum price for a good, or service. Normally set at a price above the equilibrium price.

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and a high level of competition.