Which One of the Following Factors Is Not an Explanation

question 229

Multiple Choice

Which one of the following factors is not an explanation of the positive relationship between market price and quantity supplied?

• A) The law of diminishing returns makes it more costly for firms to expand output quickly.
• B) As price increases, some less efficient firms will enter the market.
• C) For most firms, unit costs decrease as output increases in the long run.
• D) As all firms in an industry hire more factors of production, the prices paid for them often increase.

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Definitions:

Unprofitable Segment

A division or business unit within a company that consistently generates losses instead of profits, affecting the overall financial health of the company.

Manufacturing Variances

Differences between the actual costs and standard (expected) costs incurred during production, which can be categorized into material, labor, and overhead variances.

Incremental Analysis

The process of identifying the financial data that changes under alternative courses of action, used for decision-making in business.

Financial Data

Numeric information related to the financial performance, position, and cash flows of a business.