An Important Assumption That Is Made When Constructing a Demand

question 245

Multiple Choice

An important assumption that is made when constructing a demand schedule is that

• A) only price and quantity matter in determining demand.
• B) people always want a certain amount of a product.
• C) demand is too important to be left to the economists.
• D) all other determinants of demand are held constant.
• E) demand has a positive slope.

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Definitions:

Factory Utilities

Expenses incurred for electricity, gas, water, and sewage services used in the operation of a manufacturing plant or factory.

Plantwide Overhead Rate

A single rate used to allocate manufacturing overhead costs to all units produced, regardless of the department in which they were made.

Labor Intensive

A process or industry that requires a large amount of labor to produce its goods or services, as opposed to being heavily automated.

Mechanized Work

Work processes that are performed using machinery and equipment to enhance efficiency and productivity.