When Demand Increases and Supply Decreases, the

question 258

Multiple Choice

When demand increases and supply decreases, the

• A) equilibrium quantity decreases, and the equilibrium price might rise, fall, or remain constant.
• B) equilibrium price falls, and the equilibrium quantity might increase, decrease, or remain constant.
• C) equilibrium quantity increases, and the equilibrium price might rise, fall, or remain constant.
• D) equilibrium price rises, and the equilibrium quantity might increase, decrease, or remain constant.

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Definitions:

Receivable Turnover Ratio

A financial metric used to measure how efficiently a company uses its assets by calculating how many times a company can turn its accounts receivable into cash within a period.

Inventory Turnover Ratio

The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a period.

Average Days

An accounting measure used to calculate the average number of days taken for a company to collect cash from its customers or pay its debts.

Dividend Yield Ratio

An economic ratio that illustrates the yearly dividend disbursement of a company as a percentage of its stock value.