An Increase in Price

question 53

Multiple Choice

An increase in price:

• A) cannot cause a quantity effect.
• B) cannot cause a price effect.
• C) causes a decrease in revenue resulting from selling fewer units and a simultaneous increase in revenue resulting from receiving a higher price.
• D) causes an increase in quantity demanded.

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Definitions:

Price Variance

The difference between the actual price paid for something and its standard or expected price.

Actual Price

The real price at which a transaction occurs, distinct from list or estimated prices, reflecting the amount paid or received in a transaction.

Standard Price

A predetermined cost attributed to materials, labor, and overhead to facilitate budgeting and variance analysis.

Efficiency Standard

A benchmark for measuring the optimal use of resources in the production of goods or the delivery of services.