Which of the Following Explains the Relationship Between Price and the Quantity

question 174

Multiple Choice

Which of the following explains the relationship between price and the quantity supplied?

• A)When expanding output, firms will incur greater total costs.
• B)As the price of a commodity falls, producers will find it more profitable to use higher-priced inputs in their production process.
• C)As a result of rising production costs, firms can increase profits by expanding output only if the price of output increases.
• D)To expand output, firms must hire more resources, which are always of poorer quality.
• E)Consumers want more at lower prices.

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Definitions:

Book Value

Book Value is the value of an asset as recorded on the company's balance sheet, representing the asset's cost minus accumulated depreciation or amortization.

Deferred Tax Asset

An accounting term used to describe a situation where a company has paid more taxes to the government than it has shown as an expense in its financial statements, which can be used to reduce future tax liability.

Capital Cost Allowance

A tax deduction available in some jurisdictions for tangible and intangible assets, allowing businesses to write off the cost of assets over their useful life.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in a linear fashion, resulting in a constant annual depreciation expense.