If Crude Oil Is a Variable Factor of Production for a Firm

question 93

Multiple Choice

If crude oil is a variable factor of production for a firm, then an increase in the price of crude oil will lead to:

• A)a decrease in the quantity supplied by the firm, but no change in the firm's supply.
• B)a decrease in the firm's supply.
• C)an increase in the quantity supplied by the firm, but no change in the firm's supply.
• D)an increase in the firm's supply.

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Definitions:

Statement of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, dividing activity into operating, investing, and financing activities.

Operating Activities

Transactions and events that relate to the primary operations of the company, including revenue and expense activities.

Fully Depreciated

A state where an asset has reached the end of its useful life for accounting purposes, with its cost fully allocated to depreciation expense over its useful life.

Common Stock

A form of corporate equity ownership, a type of security representing an ownership share in a corporation.