Scenario 2.1: The Demand for Books Is: Q_d = 120 - P

question 112

Multiple Choice

Scenario 2.1:
The demand for books is: Q_d = 120 - P
The supply of books is: Q_s = 5P
-Refer to Scenario 2.1. If P = $15, which of the following is true?

• A) There is a surplus equal to 30.
• B) There is a shortage equal to 30.
• C) There is a surplus, but it is impossible to determine how large.
• D) There is a shortage, but it is impossible to determine how large.

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Definitions:

Operating Costs

Refers to the expenses associated with the day-to-day functioning of a business, including costs of goods sold, administrative expenses, and other operational expenses.

Equivalent Annual Cost

A financial assessment tool used to compare the cost effectiveness of two or more projects with different lifespans by normalizing their costs into annual equivalents.

Sunk Costs

Expenditures that have already been incurred and cannot be recovered.

Incremental Costs

Expenses that will be incurred only as a result of undertaking a specific action.