If each car requires a belt that costs $20 and 2,000 cars are produced for the period, then the total cost for belts is:

a) considered to be a direct fixed cost
b) considered to be a direct variable cost
c) considered to be an indirect fixed cost
d) considered to be an indirect variable cost
e) none of the above

b) Considered to be a direct variable cost

Explanation:

Direct costs are expenditures that can be traced to a specific product, project, or service. It is a cost component that arises due to the production of a particular good or service as opposed to a general expense. Direct costs contrast indirect cost that covers a variety of items, such as administration.

Variable costs are the expenses that change with production volume. An increase in production leads to an increase in variable costs. Variable costs, therefore, have a direct relationship with the output level.

Belts, in this case, are a direct variable cost because

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.