The Problem of Complementary Demand Means That in Subsistence Agricultural

question 40

Multiple Choice

The problem of complementary demand means that in subsistence agricultural economy,trying to establish a manufacturing economy meant

• A) no manufacturing firm would be willing to invest unless a large number of manufacturing industries were started simultaneously.
• B) no manufacturing firm would be willing to invest unless it was given infant industry protection.
• C) no manufacturing firm would be willing to invest unless the government agreed to purchase a minimum amount of its product.
• D) no manufacturing firm would be willing to invest unless wages were increased enough in agriculture to allow farmers to buy their product.
• E) unless there was sufficient interdependencies among the manufacturing firms.

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Definitions:

Common Fixed Expenses

Costs that do not vary with the level of production or sales and are shared among different segments of a business.

Variable Expenses

Expenses that change in proportion to the amount of goods produced or the volume of sales, including labor and materials.

Sales Territories

geographical or demographic areas assigned to sales representatives or teams to manage and cultivate customer relationships and sales activities.

Contribution Margin

The amount of revenue remaining after deducting variable costs, used to cover fixed costs and contribute to profit.