Figure 7-22 -Refer to Figure 7-22.Assume Demand Increases,which Causes the Equilibrium Price

question 39

Multiple Choice

Figure 7-22
-Refer to Figure 7-22.Assume demand increases,which causes the equilibrium price to increase from $50 to $70.The increase in producer surplus to producers already in the market would be

• A)$1,600.
• B)$600.
• C)$800.
• D)$1,200.

Understand the concept of equivalent units in a process costing system.

Determine the equivalent units of production for materials and conversion costs using the FIFO method.

Calculate the total costs transferred from one processing department to the next.

Compute the cost of units transferred out of a department.

---

Definitions:

Labor Demand

Labor demand represents the total amount of workers that employers are willing and able to hire at a given wage rate in a particular market.

Price Floors

Regulations establishing the minimum price that can be charged for a good or service, aimed at ensuring fair compensation for producers or as part of wage control policies.

Buyers

Buyers are individuals or entities that purchase goods or services in a market.

Price Floor

A government or regulatory imposed limit on how low a price can be charged for a product or a service, aimed at protecting producers.