Predict the Effect of the Following Changes on the Market

question 5

Essay

Predict the effect of the following changes on the market price and quantity utilized of eye examinations conducted by ophthalmologists:
a) an increase in the amount of insurance coverage for eye exams
b) an increase in the number of ophthalmologists
c) a decrease in the average age of the population
d) a decrease in the price of eyeglasses

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Definitions:

Variable Factory Overhead Controllable Variance

The difference between the actually incurred variable overhead and what was expected, based on the standard cost.

Factory Overhead

All indirect costs related to the manufacturing process, including maintenance, utilities, and salary of supervisory staff.

Standard

Accepted criteria or expected specifications established as a model for measuring quality, performance, or compliance.

Budgeted

The process of creating a plan for a company's spendings and incomes over a specific period, typically including projected revenues, expenses, and net income.