Use the Following to Answer Question(s): Simultaneous Shifts in Demand

question 220

Multiple Choice

Use the following to answer question(s) : Simultaneous Shifts in Demand and Supply

-(Exhibit: Simultaneous Shifts in Demand and Supply) D₁ and S₁ are original supply and demand curves, and S₂ and D₂ are new curves.In this market for a normal good, the shift in the demand curve may have been a result of:

• A) a decrease in the price of a substitute good.
• B) a decrease in the number of buyers.
• C) falling incomes.
• D) consumers' expecting the price to go up.

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Definitions:

Predetermined Overhead Rate

The rate used to assign overhead costs to products or services based on a predetermined formula.

Fixed Component

The portion of total costs that remains constant, regardless of changes in activity level.

Variable Overhead

Costs of production that vary with the level of manufacturing activity or output, such as utilities and commissions, as opposed to fixed overhead costs.

Rate Variance

The difference between the actual rate paid for inputs and the standard rate expected, often related to labor or manufacturing overhead.