Suppose Apple Raises the Cost of Downloading a Song from ITunes

question 181

Multiple Choice

Suppose Apple raises the cost of downloading a song from iTunes from $0.99 per song to $1.49 per song.This price increase will cause a(n) ________.

• A) increase in demand
• B) decrease in demand
• C) increase in quantity demanded
• D) decrease in quantity demanded

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Definitions:

Special Tools

Custom or unique tools designed for specific tasks or projects, often not found in standard toolsets.

Productive Capacity

The maximum output a system can produce over a set period under normal or full-scale operating conditions.

Variable Factory Overhead

Costs that vary with the level of production, such as supplies and energy for machinery.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor. Also known as manufacturing overhead, this includes costs such as utilities, depreciation, and maintenance of equipment.