The Supply Curve and the Demand Curve Intersect at the Point

question 25

Multiple Choice

The supply curve and the demand curve intersect at the point where:

• A)at equilibrium.
• B)where supply is highest.
• C)where demand is highest.
• D)where prices are maximized.

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Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business, such as materials or labor directly tied to production volume.

Break-even Sales

The point at which total sales equal total expenses, resulting in no profit or loss.

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business, such as rent, salaries, and insurance.

Variable Costs

Expenses that change in proportion to the activity of a business, such as materials and labor costs that vary with production volume.