Which One of the Following Correctly Describes How Price Adjustment

question 69

Multiple Choice

Which one of the following correctly describes how price adjustment eliminates a surplus?

• A)As the price rises,the quantity demanded decreases and the quantity supplied increases.
• B)As the price rises,the quantity demanded increases and the quantity supplied decreases.
• C)As the price falls,the quantity demanded decreases and the quantity supplied increases.
• D)As the price falls,the quantity demanded increases and the quantity supplied decreases.
• E)As the price falls,the demand for substitutes decreases,which eliminates the surplus.

---

Definitions:

Maturity Value

The total amount payable to an investor at the end of a fixed term investment, including the principal and the interest.

Interest Amount

The sum of money paid or earned as interest, calculated by applying the interest rate to the principal.

Simple Rate

An interest calculation method where interest is not compounded on earned interest, instead applied only on the principal amount.

Principal Plus Interest

It is the total amount due that includes the original amount borrowed (principal) in addition to the charged interest on that principal.