If the Price of Crude Oil Falls, the Equilibrium Price

question 122

Multiple Choice

If the price of crude oil falls, the equilibrium price of gasoline ________ and the equilibrium quantity ________.

• A) rises; increases
• B) rises; decreases
• C) falls; increases
• D) falls; decreases

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Definitions:

Absorption Costing

A method of costing that includes all manufacturing costs—both fixed and variable—in the cost of a product.

Break-Even

The financial point at which revenues exactly cover all costs, both fixed and variable, representing no profit or loss situation with different wording.

Sales Dollars

The total monetary value of sales within a specific time period.

Home Division

A segment or branch of a company that operates in the headquarters' country, focusing on domestic operations or products.