An Increase in Supply and a Decrease in Demand Will

question 55

Multiple Choice

An increase in supply and a decrease in demand will _____ price.

• A) lower
• B) raise
• C) double
• D) not affect

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output, such as materials and labor directly used in the manufacturing process.

Average Cost

Generally refers to the average total cost, representing the per unit total cost of production, including both fixed and variable costs.

Average Total Cost Curve

A graphical representation showing how the average cost of production changes as the quantity of output is altered.

Total Cost

The total amount of money spent on creating goods or services, encompassing both constant and fluctuating expenses.