The Table Given Below Reports the Quantity Demanded and Supplied

question 91

Multiple Choice

The table given below reports the quantity demanded and supplied of a commodity at different prices in a market.Table 3.5

-Which of the following is true of a price floor?

• A)A price floor allows supply and demand to function effectively.
• B)A price floor is set such that the price is not allowed to increase above a certain level.
• C)A price floor is beneficial to buyers in a market.
• D)A price floor usually creates a shortage of a good in a market.
• E)A price floor is set such that the price is not allowed to decrease below a certain level.

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Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, which can affect costs.

Actual Price

The real price at which a transaction occurs, as opposed to an estimated or listed price.

Direct Materials

Raw materials that can be directly traced to the production of specific goods or services, reflecting in the cost of goods sold.

Materials Price Variance

The difference between the actual cost and the standard cost of materials used in production.