When Production Technology Improves, Supply Increases and the Equilibrium

question 181

Multiple Choice

When production technology improves, supply increases and the equilibrium

• A) price and quantity increase.
• B) price and quantity decrease.
• C) quantity rises and the equilibrium price falls.
• D) quantity falls and the equilibrium price rises.

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Definitions:

FOH Budget Variance

The difference between the actual and budgeted factory overhead costs over a certain period, indicating under or overspending.

Work in Process

Inventory that includes materials that have begun the production process but are not yet completed products.

Retained Earnings

The accumulated net income of a company that is retained by the company rather than distributed to shareholders as dividends.

Materials Price Variance

The difference between the actual cost of materials and the standard cost, multiplied by the quantity used.