Figure 11-3b -In Figure 11-3b,the Demand Curve Shifts from D₁ to D2.This

question 66

Multiple Choice

Figure 11-3b
-In Figure 11-3b,the demand curve shifts from D₁ to D2.This most likely represents

• A) an increase in demand that did not require a change in price but was the result of a change in one or more demand factors.
• B) an increase in demand that required a decrease in price.
• C) no change in price and a decrease in demand that results from internal business practice changes.
• D) no change in demand or price but a greater profit due to economies of scale.
• E) a decrease in price from $8 to $6 per unit.

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Definitions:

Discounted Payback

A capital budgeting method that calculates the time required to recoup the investment in a project, by taking into account the present value of expected cash flows.

Financial Break-Even

The sales level that results in a zero NPV.

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, indicating how much revenue contributes towards covering fixed costs and generating profit.

Accounting Break-Even

Accounting Break-Even is the point at which total revenues equal total expenses (including both fixed and variable costs), resulting in neither profit nor loss.