There Is a Surplus of Tomatoes in the Market

question 65

Multiple Choice

There is a surplus of tomatoes in the market. This implies that:

• A) The current price is set above the equilibrium level
• B) The price will be rising, as a result
• C) Supply of tomatoes is more than the demand
• D) Quantity demanded is more than quantity supplied

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Definitions:

Costs

Costs refer to the expenditures incurred by a business in the process of generating revenues.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit.

Fixed Costs

Expenses that remain constant regardless of the amount of production or sales, including rent, wages, and insurance premiums.

Mixed Cost

A cost that contains both fixed and variable components and changes with the level of output but not directly in proportion.