At the Market-Clearing Price for a Commodity

question 14

Multiple Choice

At the market-clearing price for a commodity,

• A)prices will remain unchanged,even if there is excess demand.
• B)there may be excess demand for a product but not excess supply.
• C)shifts in the supply or demand curves will not cause price changes.
• D)the quantity supplied of the commodity equals quantity demanded.
• E)there will never again be any pressure for prices to change,independent of what happens to demand or supply.

---

Definitions:

Forming Department

A division within a manufacturing process where raw materials begin their transformation into finished products, typically through shaping or molding.

Materials Cost

The total expense of materials used in the production of a product, including direct materials and any additional materials necessary for production.

Conversion Costs

The combined costs of direct labor and manufacturing overheads incurred to convert raw materials into finished goods.

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all inventory items, weighted by the quantity of each item.