When the Demand for a Good Decreases, Its Equilibrium Price

question 94

Multiple Choice

When the demand for a good decreases, its equilibrium price _{-------------}and equilibrium quantity_{-------------}
.

• A)rises; decreases
• B)falls; decreases
• C)falls; does not change
• D)falls; increases
• E)rises; increases

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Definitions:

Activity Rate

A measure used in activity-based costing to allocate overhead costs to products or services, based on specific activities or cost drivers.

Machine Hour

A measure of production time, used as a basis for allocating manufacturing overhead costs to products based on machine usage.

Factory Overhead Rates

A calculation used in manufacturing to allocate indirect costs, like utilities and salaries, to products.

Machine Hours

A measure of the amount of time a machine is operated, used as a basis for allocating manufacturing overhead costs to products.