The Price of a New Textbook Increased from $60 to $75

question 197

Multiple Choice

The price of a new textbook increased from $60 to $75 in one year, while the price of a used textbook increased by 25 percent. What happened to the relative price of a used textbook?

• A)It increased by 25 percent.
• B)It increased by 10 percent.
• C)It remained constant.
• D)It can't be determined without knowing the nominal price of the used textbook in at least one of the years.

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Definitions:

Fixed Product Cost

Costs that do not vary with the level of production or sales, such as salaries of permanent employees and rent.

Factory Supervisor

An individual who oversees the work of employees in a manufacturing facility, ensuring that production goals and standards are met.

Wages

Payments made to employees, typically calculated on an hourly, daily, or piecework basis, for labor or services provided.

Finished Goods

Products that are completed and ready to be sold.