Given the Following Supply and Demand Curves for Six-Packs of Beer

question 25

Multiple Choice

Given the following supply and demand curves for six-packs of beer, a price of $7.00 would produce:
Demand Q = 31,000 - 2000P
Supply Q = 10,000 + 1500P

• A) equilibrium.
• B) a shortage of 3,500 six-packs of beer.
• C) a surplus of 3,500 six-packs of beer.
• D) a shortage of 17,000 six-packs of beer.
• E) a surplus of 20,500 six-packs of beer.

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Definitions:

NPV

The calculation used to find the current value of future cash flows minus initial investments, which helps in evaluating the feasibility of investments or projects.

Credit Policy

The guidelines a company follows to determine creditworthiness, terms of credit, and how to collect owed money, affecting its trade credit and financing approaches.

Accounts Receivable Approach

A method used to estimate the value of a firm's accounts receivable and gauge the potential for uncollectible invoices.