If the Demand Curve for a Life-Saving Medicine Is Perfectly

question 208

Multiple Choice

If the demand curve for a life-saving medicine is perfectly inelastic, a reduction in supply will cause the equilibrium price to:

• A)​rise and the equilibrium quantity to fall.
• B)​rise and the equilibrium quantity to stay the same.
• C)​rise and the equilibrium quantity to rise.
• D)​stay the same and the equilibrium quantity to fall.

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Definitions:

Standard Costs

Standard costs are predetermined estimates of the cost to manufacture a single unit or a number of units of a product during a specific time period.

Variance Standard

A method used in budgeting and accounting to analyze the difference between planned financial outcomes and actual results.

Quantity Standard

A predetermined benchmark of the amount of input that should be used in the production of goods or services.

Quantity Variance

The difference between the actual quantity of material used in production and the standard quantity expected to be used.