Which of the Following Statements Is Correct

question 10

Multiple Choice

Which of the following statements is correct?

• A)A change in demand or supply can only be caused by a change in price.
• B)A simultaneous decrease in demand and increase in supply will result in an increase in equilibrium price and uncertain effect on quantity.
• C)If price is currently above equilibrium, market adjustments will result in a decrease in price and quantity supplied.
• D)An increase in supply invariably leads to a shortage in the affected market.

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Definitions:

Fixed Costs

Expenses that do not change in proportion to the activity of a business.

Finished Goods Inventory

The direct materials costs, direct labor costs, and factory overhead costs of finished products that have not been sold.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials, labor, and overhead expenses.

Cost of Goods Manufactured

The total cost of all materials, labor, and manufacturing overhead used in producing finished goods over a specific period.