This Graph Demonstrates the Domestic Demand and Supply for a Good,as

question 10

Multiple Choice

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good.
According to the graph shown,if this economy were to open to trade,domestic producers would have to cut:

• A)production by 55 units.
• B)production by 90 units.
• C)prices by $3.
• D)prices by $7.

---

Definitions:

Fixed Overhead Cost

Indirect fixed costs associated with the production process, such as rent and insurance, that do not vary with the level of output.

Contribution Margin Report

A financial report detailing the variable costs deducted from net sales to determine the contribution margin, used in managerial accounting to make decisions.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from total revenue.

Manufacturing Margin

The difference between the sales revenue of manufactured goods and the direct costs associated with producing those goods.