Which of These Can Possibly Account for a Decrease in the Demand

question 54

Multiple Choice

Which of these can possibly account for a decrease in the demand for peanut butter,a normal good?

• A)An increase in the supply of peanut butter
• B)An increase in the price of peanut butter
• C)A substantial increase in the price of bread
• D)A drought in Georgia that destroyed 30 percent of the peanut crop
• E)An increase in consumer income

---

Definitions:

Mixed Cost

A cost that contains both variable and fixed cost components, changing in total with volume but remaining constant per unit.

Variable Cost

Costs that change in proportion to the good or service that a business produces, such as raw materials and direct labor expenses.

Fixed Cost

Expenses that do not change with the level of production or sales over a certain period, such as rent or salaries.

Period Cost

Costs that are expensed in the period in which they are incurred, without direct link to production activity, such as selling, general, and administrative expenses.