How Will an Increase in Price Tend to Affect Demand

question 153

Multiple Choice

How will an increase in price tend to affect demand?

• A)Demand will increase.
• B)Demand will decrease.
• C)Demand will not change.
• D)Uncertain.

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Definitions:

Merchandise Purchases Budget

A financial plan detailing the amount to be spent on acquiring inventory for sale during a certain period.

Budgeted Balance Sheet

A financial statement that projects the financial position of a company at a future date, based on estimated revenues, expenses, and capital expenditures.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overheads - in the cost of a product.

Full Costs

The complete cost of producing an item or providing a service, including direct, indirect, fixed, and variable costs.