In an Increasing Cost Industry,an Unexpected Decrease in Demand Would

question 1

Multiple Choice

In an increasing cost industry,an unexpected decrease in demand would lead to ____ costs and a ____ price in the long run?

• A) higher; higher.
• B) higher; lower.
• C) lower; lower.
• D) lower; higher.

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Definitions:

Unit Costs

The expense associated with manufacturing, storing, or buying a single unit of a good or service.

Materials

Basic items or substances used in the manufacturing process to create products or goods.

Conversion Costs

The total expenses of direct labor and manufacturing overheads used to transform raw materials into completed products.

Production Cost Report

A document that summarizes the total cost associated with producing a specific quantity of goods during a specific period.