When There Is a Surplus of a Product in a Market

question 74

Multiple Choice

When there is a surplus of a product in a market the:

• A) price will rise.
• B) price must be above the equilibrium price.
• C) producers will expand output and sales will rise.
• D) price must be below the equilibrium price.

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Definitions:

Direct Labor Costs

These are the salaries and wages paid to employees directly involved in producing a company's goods or services.

Controllable Variance

Controllable variance refers to the difference between actual and expected figures that can be influenced by the actions of managers.

Overhead Costs

General expenses related to the operation of a business that are not directly attributed to creating a product or service.

Volume Variance

The difference between the budgeted and actual quantity of units sold or produced, affecting budget and operational planning.