The Price of Peanuts Increases

question 26

Multiple Choice

The price of peanuts increases.At the same time,we see the price for Jelly rise.How does this affect the market for peanut butter?

• A)The demand curve will shift to the left;the supply curve will shift to the left
• B)The demand curve will shift to the left;the supply curve will shift to the right
• C)The demand curve will shift to the right;the supply curve will shift to the left
• D)The demand curve will shift to the right;the supply curve will shift to the right

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Definitions:

Predetermined Overhead Rate

A predetermined rate for distributing overhead expenses to products or services, based on anticipated costs and levels of activity.

Machine-Hours

A measure of production output or activity level based on the number of hours machines are operated.

Unused Capacity

The portion of a company’s resources or capabilities that are not currently utilized or producing income.

Capacity

The maximum output that a company can produce under normal conditions over a certain period.