The Law of Demand Indicates That as the Price of a Good

question 11

Multiple Choice

The law of demand indicates that as the price of a good increases:

• A) suppliers sell less of it.
• B) suppliers sell more of it.
• C) buyers want to buy less of it.
• D) buyers want to buy more of it.

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Definitions:

Direct Costs

Direct costs are expenses directly tied to the production of a product or service, such as raw materials and labor.

Marginal Tax Rate

The rate of tax applied to the next dollar of taxable income, indicating the percentage of additional income that is taken in taxes.

Amortizing

The process of paying off debt with a fixed repayment schedule in regular installments over a period of time, including both interest and principal.

Flotation Costs

Expenses incurred by a company in issuing new securities, including fees for underwriters, legal, accounting, and other registration and compliance costs.