Exhibit 3-3 Demand Curves

question 42

Multiple Choice

Exhibit 3-3 Demand curves

-Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of domestic cars on the demand for foreign cars?

• A) Graph A.
• B) Graph B.
• C) Graph C.
• D) Graph D.

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Definitions:

Activity-based Costing

A costing method that identifies the activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.

Overhead Costs

Expenses related to the operation of a business that cannot be directly attributed to a specific product or service, such as rent, utilities, and administration expenses.

Activity Rate

The predetermined overhead rate used in activity-based costing to allocate costs to products or services based on specific activities.

Activity-based Costing

A costing method that assigns costs to products or services based on the activities they require.