If the Demand for a Product Increases, Then We Would

question 45

Multiple Choice

If the demand for a product increases, then we would expect equilibrium price

• A)to increase and equilibrium quantity to decrease.
• B)to decrease and equilibrium quantity to increase.
• C)and equilibrium quantity both to increase.
• D)and equilibrium quantity both to decrease.

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Definitions:

Manufacturing Overhead Applied

The amount of manufacturing overhead costs allocated to individual products or product lines based on a predetermined overhead rate.

Direct Materials

Raw materials that are directly used in the manufacturing of a product and can be easily traced back to the finished goods.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual products or job orders, based on a predetermined activity base.

Direct Labor Cost

The wages and related expenses for employees who are directly involved in the production of goods or services.