The Figure Given Below Shows the Aggregate Demand and Supply

question 11

True/False

The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7

-The governmental interference with the market exchange often reduces the total surplus.

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Definitions:

Fixed Expenses

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

Variable Costing

An approach in accounting that takes into account only the variable aspects of production costs (such as direct materials, direct labor, and variable manufacturing overhead) in the computation of product prices.

Net Operating Income

Net Operating Income is a measure of a company's profitability from its regular business operations, excluding income and expenses from interest, taxes, and other non-operational activities.

Fixed Manufacturing Overhead

Regular, constant expenses related to the production process that are not affected by the level of goods produced, such as rent and salaries of management.