What Is the Usual Response of Firm to an Increase

question 64

Multiple Choice

What is the usual response of firm to an increase in the price of what they sell?

• A)An increase in output.
• B)An increase in hiring factors of production.
• C)An increase in the profit level of the firm.
• D)An increase in employment at the firm.
• E)All of the above.

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Definitions:

Materials Quantity Variance

The difference between the expected amount of materials needed for production and the actual amount used, affecting production costs.

Standard

Typically refers to an accepted level of quality or achievement that is used as a measure, norm, or model in comparative evaluations.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product and are an integral part of the finished product.

Actual Price

The price at which a good or service is sold in the market, as opposed to its listed or theoretical price.