The Law of Demand Indicates That

question 181

Multiple Choice

The law of demand indicates that

• A) every physical good has a use.
• B) when people want a good badly enough, they will find a way to pay for it.
• C) the desire for a good is unrelated to its price.
• D) the quantity of a good that people will buy is inversely related to the price of the good.

---

Definitions:

Predetermined Overhead Rate

An estimated rate used for allocating fixed and variable overhead costs to products or services based on expected activity levels.

Automated Jointer

A machine tool used in woodworking for making flat surfaces along the lengths of boards, which operates automatically.

Capacity

The maximum level of output that a company can sustain to make a product or provide a service, given current resources and constraints.

Job-Order Costing

An accounting method that collects and assigns manufacturing costs to individual units or batches of production, suitable for customized products.