Assume That There Is an Inverse Relationship Between the Price

question 81

Multiple Choice

Assume that there is an inverse relationship between the price and quantity demanded of personal computers. If the price of computers increases, the

• A) quantity supplied decreases.
• B) quantity demanded decreases.
• C) quantity demanded increases.
• D) demand curve shifts to the left.
• E) demand curve shifts to the right.

---

Definitions:

Average Fixed Cost

The total fixed costs of production divided by the quantity of output produced, showing how fixed costs per unit change with output levels.

Marginal Cost

The cost of producing one additional unit of a good or service, considering the variable costs involved.

Total Cost

The sum of all the expenses incurred in producing a good or service, including both fixed and variable costs.

Average Cost

The cost per unit of output, calculated by dividing the total cost of production by the number of units produced.