When the Price of Apples Goes Up

question 167

Multiple Choice

When the price of apples goes up

• A) the demand for apples will decrease, ceteris paribus.
• B) the demand for apples will increase, ceteris paribus.
• C) the quantity of apples demanded will decrease, ceteris paribus.
• D) the quantity of apples demanded will increase, ceteris paribus.

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Definitions:

Fixed Overhead

The total of all overhead costs that do not change in response to activity levels in the short term, such as rent and salaries.

Gross Profit

The difference between sales revenue and the cost of goods sold before deducting operating expenses, interest, and taxes.

Period

A specific duration of time used for financial reporting and analysis, typically a fiscal quarter or year.

Cost of Goods Sold

Direct expenditures linked to the creation of goods sold by a business.