Use the Following to Answer Questions

question 216

Multiple Choice

Use the following to answer questions :
Figure: Supply and Demand in the Orange Juice Market
-(Figure: Supply and Demand in the Orange Juice Market) Look at the figure Supply and Demand in the Orange Juice Market. The market is in equilibrium at point C. Suppose most people drink orange juice only with champagne. What will be the new equilibrium point in the orange juice market if a law banning alcohol passes?

• A)A
• B)B
• C)D

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Definitions:

Raw Materials

Basic materials that are used in the production process of goods, often transformed into finished products.

Fixed Overhead

Costs that do not vary with the level of production or sales, including rent, salaries, and insurance expenses.

Unfavorable Variance

A situation where actual results are worse than expected results, often indicating higher costs or lower revenues than planned.

Favorable Variance

A financial term indicating that actual costs were lower than the planned or standard costs in a budget.