If a Rise in the Price X Causes Less Y

question 5

Multiple Choice

If a rise in the price x causes less y to be demanded:

• A)x and y are gross complements.
• B)x and y are gross substitutes.
• C)x and y are net complements.
• D)x and y are net substitutes.

Learn the importance of decision-making in operations management.

Understand the efficiency challenges in service operations versus manufacturing.

Understand and calculate raw material and labour productivity.

Analyze the impact of equipment changes on firm productivity.

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Definitions:

Favorable Cost Variance

A variance that occurs when the actual cost is less than standard cost.

Standard Cost

A predetermined cost of manufacturing, storing, and marketing a product, used for budgeting and performance evaluation.

Variances

Differences between planned or expected financial performances to the actual financial performance.

Standard Costs

Predetermined costs for materials, labor, and overhead that are used as benchmarks to measure actual performance against expected results.