When prices fall, the decrease in demand for the product when the competitors' prices are not met will be called ___________?
Correct answer: C. downward demand spiral
- A. downward supply spiral
- B. upward supply spiral
- C. downward demand spiral
- D. upward demand spiral
Explanation
A downward demand spiral occurs when price reductions or failure to match competitors' prices cause demand to fall further. The word demand is the key distinction from a supply spiral.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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