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Pass C_IBP_2105 Exam Cram

Exam Code: C_IBP_2105

Exam Name: SAP Certified Application Associate - SAP Integrated Business Planning

Version: V15.35

Q & A: 208 Questions and Answers

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NEW QUESTION: 1
Which of the following factors is not an explanation of the positive relationship between market price and quantity supplied?
I). The law of diminishing returns makes it more costly for firms to expand output quickly.
II). As all firms in an industry hire more factors of production, the prices paid for them often increase.
III). For most firms, unit costs decrease as output increases in the long run.
IV). As price increases, some less efficient firms will enter the market.
A. I and II.
B. III only.
C. III and IV.
Answer: B
Explanation:
If unit costs decreased as output increased, this would imply that firms would allow prices to fall as they expanded output. Under an increasing cost industry, the firm requires a higher price in order to expand output because its costs increase. This explains the positive relationship between price and level of output.

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