A Small Increase or Decrease in Consumer Demand Can Produce

question 108

Multiple Choice

A small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to manufacture the consumer product.What is this a result of?

• A) the demand fluctuation principle
• B) the multiplier effect
• C) the joint demand principle or division effect
• D) the inelastic demand effect

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs from total revenue.

Income Distribution

The allocation of earned income or revenue to various stakeholders, such as dividends to shareholders or wages to employees.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset since it was put into use, representing how much of its value has been used up.

Allowance

A provision in accounting for a reduction in the value of receivables or inventories, often related to potential bad debts or damaged goods.