Exhibit 3-6 Milk Market In Exhibit 3-6, Which of the Following Are the Equilibrium

question 151

Multiple Choice

Exhibit 3-6 Milk market $$\begin{array} { | c | c | c | } \hline \text { Price per Quart } & \begin{array} { c } \text { Quantity Demanded } \\\text { (Quarts per week) }\end{array} & \begin{array} { c } \text { Quantity Supplied } \\\text { (Quarts per week) }\end{array} \\\hline 0.70 & 20 & 180 \\0.60 & 60 & 140 \\0.50 & 100 & 100 \\0.40 & 140 & 60 \\0.30 & 180 & 20 \\& & \\\hline\end{array}$$ In Exhibit 3-6, which of the following are the equilibrium price and equilibrium  quantity in the milk market?

• A) $0.70 per quart and 200 quarts of milk.
• B) $0.30 per quart and 100 quarts of milk.
• C) $0.50 per quart and 100 quarts of milk.
• D) $0.40 per quart and 60 quarts of milk.

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Definitions:

Direct Materials Price Variance

The difference between the actual cost of direct materials used in production and the expected (standard) cost of those materials.

Overhead

The ongoing business expenses not directly attributable to creating a product or service, such as rent, utilities, and administrative costs.

Standard Labor Hours

The set amount of time expected to be used to complete a specific task or manufacture a product under normal conditions.

Direct Materials Quantity Variance

The difference between the actual amount of direct materials used in production and the standard amount expected to be used, valued at the standard cost.