Which of the Following Is True Concerning the Materials Price

question 61

Multiple Choice

Which of the following is true concerning the materials price variance?

• A) It is the difference between the actual and standard unit price of an input multiplied by the number of inputs used.
• B) It is the difference between the actual and standard unit price of an output multiplied by the number of inputs used.
• C) It is the difference between the actual and standard unit price of an input multiplied by the number of inputs purchased.
• D) It is the difference between the actual and standard unit price of an output multiplied by the number of inputs purchased.
• E) None of these.

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Definitions:

Long-Run Equilibrium

A state in a market where all firms are making zero economic profit, input factors are fully adjustable, and no firm has an incentive to enter or exit the market.

Average Total Cost Curve

A graphical representation showing how the average cost per unit of output varies with the level of output.

Profit-Maximizing Quantity

The quantity of output that an entity can produce and sell at the highest profit, considering its costs and market demand.

Long-Run Equilibrium

A state in which all firms in a given industry are making zero economic profit, leading to an optimal allocation of resources given current technology and factor prices.