A Decrease in Demand Will Always

question 117

Multiple Choice

A decrease in demand will always

• A)increase producer surplus.
• B)decrease producer surplus and decrease consumer surplus.
• C)decrease consumer surplus and increase consumer surplus.
• D)increase consumer surplus.

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Definitions:

Direct Materials Cost

The cost of raw materials directly used in the manufacturing of a product.

Finished Product

A final product that has completed all stages of production and is ready for sale.

Activities

Activities refer to actions, tasks, or operations that are carried out by individuals or organizations, often aiming towards achieving specific goals or outcomes.

Direct Labor Efficiency Variance

A measure used in cost accounting to gauge the difference between the actual hours worked and the standard hours expected, multiplied by the standard labor rate, used in the production of goods.