If Demand Increases and Supply Decreases in a Market That

question 141

Multiple Choice

If demand increases and supply decreases in a market that is in equilibrium, the equilibrium quantity will _____

• A) increase while the equilibrium price will remain unchanged.
• B) remain unchanged while the equilibrium price will decrease.
• C) increase only if the decrease in supply is more than the increase in demand.
• D) increase only if the decrease in supply is less than the increase in demand.
• E) increase only if the decrease in supply is more than the decrease in demand.

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Definitions:

Estimated Manufacturing Overhead

The forecasted indirect costs associated with the production process, not directly tied to specific units.

Machine-Related

Machine-related refers to costs, activities, or operations directly associated with the machinery used in production or manufacturing processes.

Quality Costs

Expenses associated with preventing, detecting, and correcting defective work, including costs of quality control measures and rework.

Direct Material Costs

The costs of raw materials or components that are directly traceable to a finished product.