If Price (P) and Quantity (Q) Are Directly Related, This

question 126

Multiple Choice

If price (P) and quantity (Q) are directly related, this means that

• A) a change in Q will alter P, but a change in P will not alter Q.
• B) if P increases, Q will decrease.
• C) if P increases, Q will also increase.
• D) an increase in P will cause Q to change, but the direction in which Q changes cannot be predicted.

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Definitions:

Accounting Profit

The net income for a company after all expenses have been subtracted from total revenue, according to standard accounting practices.

Explicit Costs

Direct, out-of-pocket expenses incurred in the operation of a business or the execution of a transaction.

Production

The process or method of creating goods and services through the combination of labor, materials, and technology.

Fixed Inputs

Resources in production that remain constant in quantity regardless of the level of output or activity.