Suppose Both the Demand for and Supply of Salsa Increase

question 156

Multiple Choice

Suppose both the demand for and supply of salsa increase (although not necessarily by the same amount) .What can we conclude about changes in the price and quantity of salsa?

• A)Both the price and quantity increase.
• B)The price increases but the change in the quantity cannot be determined.
• C)The quantity increases but the change in the price cannot be determined.
• D)Both the price and quantity decrease.

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Definitions:

Investing Activity

Transactions involving the purchase and sale of long-term assets and other investments not considered as cash equivalents.

Interest

Payment for the use of another person’s money.

Bonds Payable

Bonds payable refers to long-term debt instruments issued by a company to investors, promising to pay back with interest at specified maturity dates.

Operating Activities

Cash flow activities that include the cash effects of transactions that create revenues and expenses and thus enter into the determination of net income.