Which of the Following Is the Best Example of the Law

question 82

Multiple Choice

Which of the following is the best example of the Law of Supply?

• A) When the cost of production of cotton fell, the market price of cotton also fell.
• B) When the market price of pens increased, sellers started supplying more pens.
• C) When the market price of pens increased, sellers started supplying fewer pens.
• D) When the cost of production of cotton increased, all suppliers' willingness to accept decreased.

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Definitions:

Manufacturing Overhead

All indirect costs associated with the production process, excluding direct material and direct labor costs.

Predetermined Overhead Rate

A rate established in advance to allocate overhead costs to products or services based on a specific activity base.

Machine-Hours

A measure of production time where one machine-hour equals the operation of one machine for one hour.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, used as a base for allocating overhead costs to products.