If Total Production Is Less Than Total Expenditures,then Business Firms

question 99

Multiple Choice

If total production is less than total expenditures,then business firms

• A) have overproduced.
• B) will cut back on production.
• C) will raise production.
• D) will experience increases in inventory.
• E) a and d

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Definitions:

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Cost

A cost that varies with the level of output or sales, such as materials and labor directly involved in production.

Measure Of Activity

A quantifiable metric used to assess the level of operation or output, often tied to performance or productivity evaluation.

Variable Cost

Charges that fluctuate based on the quantity of output or level of sales.