Consider the Market for Wheat

question 80

Multiple Choice

Consider the market for wheat.If there is an improvement in harvesting technology,

• A) the supply curve for wheat shifts rightward.
• B) the demand curve for wheat shifts rightward.
• C) there is a movement up along the demand curve.
• D) the equilibrium price rises.
• E) the demand curve for wheat shifts leftward.

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Definitions:

Contribution Margin

The differential between sales and variable costs, indicative of a product's profitability before fixed costs are subtracted.

Variable Costs

Expenses that change in proportion to the activity of a business, such as costs for raw materials or production expenses, in contrast to fixed costs.

Fixed Manufacturing Cost

Expenses that do not change with the level of production, such as rent for factory premises, salaries for permanent staff, and depreciation of equipment.

Manufacturing Overhead Cost

Expenses related to the production process that are not directly tied to a specific product, including utilities, depreciation, and salaries for production supervisors.