An Increase in Price Will Lead to a Lower Quantity

question 69

Multiple Choice

An increase in price will lead to a lower quantity demanded because:

• A)suppliers will supply only the smaller amount.
• B)quality deteriorates.
• C)people will purchase less of the good.
• D)all of the above.
• E)none of the above.

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Definitions:

Machine-Hours

A measure of production volume based on the total hours machines are run in the manufacturing process, often used to allocate overhead costs.

Departmental Predetermined Rates

The estimated overhead rates calculated for specific departments within a company to allocate costs appropriately.

Manufacturing Overhead

All indirect factory-related costs incurred during the production process, excluding direct materials and direct labor.

Machine-Hours

A measure of the amount of time machines are utilized during the production process.