Refer to the Figure Below

question 27

Multiple Choice

Refer to the figure below. At a price of $3, there will be:

• A) an excess demand of 5 units.
• B) an excess demand of 7 units.
• C) an excess supply of 7 units.
• D) an excess supply of 2 units.

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Definitions:

Fixed Expense

Fixed expense refers to costs that do not fluctuate with changes in production level or sales volume.

Master Budget

A comprehensive financial planning document that includes all of a company’s budgets, projecting its financial activities over a specific period.

Raw Materials

The basic materials from which products are made, prior to being processed or manufactured into final goods.

Finished Goods Inventory

The stock of completed products ready for sale, held at the end of an accounting period.