Refer to the Information Provided in Figure 12

question 152

Multiple Choice

Refer to the information provided in Figure 12.4 below to answer the question(s) that follow. Figure 12.4
There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S^{0 and D0.}
-Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, the likely change in capital flow in sector Y will eventually

• A) eliminate all profits.
• B) eliminate all losses.
• C) generate excess profits.
• D) result in excess losses.

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Definitions:

Organizational Operating Surplus

The excess of revenues over operating expenses within an organization, indicating financial health and efficiency.

Accounting

the systematic process of recording, analyzing, and reporting financial transactions for a business or individual.

Financial Management

The efficient and effective management of money in such a manner as to accomplish the objectives of the organization.

Fixed Assets

Long-term tangible assets, such as buildings, machinery, and equipment, that a company uses in its operations and is not expected to consume or sell within a year.