In Response to a Shortage the Market Price of a Good

question 75

True/False

In response to a shortage the market price of a good will rise;as the price rises,the demand will decrease and supply will increase until equilibrium is reached.

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Definitions:

Purchasing

The process of obtaining goods or services, usually for business purposes.

Cost Drivers

Factors that cause a change in the cost of an activity, impacting the economic amount associated with production or delivery of a service.

Variable Costs

Costs that vary in direct proportion to changes in production or sales volumes, such as raw materials and direct labor.

Fixed Costs

Costs that do not change with the level of output or production, such as rent, salaries, and insurance.