If the Costs to Produce Pizza Increase, Which Will Occur

question 263

Multiple Choice

If the costs to produce pizza increase, which will occur?

• A) The supply of pizza will decrease.
• B) The quantity of pizzas supplied will increase as sellers try to cover their costs.
• C) Pizza will cease to be produced and sold.
• D) The demand curve for pizza will shift leftward when the price of a pizza increases.
• E) The demand curve for pizza will shift rightward when the price of a pizza increases.

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Definitions:

Rate of Mark-up

A pricing strategy calculation, expressed as a percentage, indicating how much higher a product's selling price is compared to its cost to produce or purchase.

Overhead Expenses

Costs not directly tied to the creation of a product or service but necessary for running a business, such as rent and utilities.

Volume Discount

A price reduction applied to a purchase based on the quantity of items bought, encouraging larger orders.

Breakeven Price

The market price at which the total costs of production equal the revenue derived from selling a product, resulting in neither profit nor loss.