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Explain the Effect of the Following Changes on Equilibrium Price

question 132

Essay

Explain the effect of the following changes on equilibrium price and quantity of a commodity:
(a) increase in average incomes.
(b) increase in population.


Definitions:

Direct Labor Wage Rate

The rate of compensation paid to employees who directly work on the production of goods or services.

Raw Materials Cost

The expense incurred by a company for the raw materials that are used in the manufacturing process to produce finished goods.

Budgeted Selling Price

The price at which a company plans to sell its products or services, often used in budgeting and financial forecasting.

Direct Labor-Hours

A quantification of the total hours spent by employees working directly on the production of goods or services.

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