Consider the Market for Smartphones

question 85

Multiple Choice

Consider the market for smartphones.Suppose the price of a smartphone falls.Explain the effect of this event on the quantity of smartphones demanded and on the demand for smartphones.

• A)The quantity of smartphones demanded is unchanged and the demand for smartphones increases.
• B)The quantity of smartphones demanded decreases and the demand for smartphones is unchanged.
• C)The quantity of smartphones demanded increases and the demand for smartphones is unchanged.
• D)The quantity of smartphones demanded increases and the demand for smartphones also increases.
• E)The quantity of smartphones demanded is unchanged and the demand for smartphones decreases.

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Definitions:

Accounts Receivable

Funds that customers owe to a business for goods or services already provided but not yet compensated for.

Sales Tax Payable

A liability account that accumulates the collected sales tax from customers to be remitted to the respective tax authorities.

Asset Account

An asset account is a category in the financial statements that reports the value of a company's assets, such as cash, inventory, property, and equipment.

Liability Account

A type of accounting ledger entry that represents a company's legal debts or financial obligations that arise during business operations.