Which of the Following Correctly Describes How Price Adjustments Eliminate

question 39

Multiple Choice

Which of the following correctly describes how price adjustments eliminate a shortage?

• A) As the price falls, the quantity demanded decreases while the quantity supplied increases.
• B) As the price falls, the quantity demanded increases while the quantity supplied decreases.
• C) As the price rises, the quantity demanded decreases while the quantity supplied increases.
• D) As the price rises, the quantity demanded increases while the quantity supplied decreases.

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Definitions:

Profit Center

A division whose parent company evaluates it on the basis of the profit it earns.

Executives

Executives are high-level managers or administrators in organizations, responsible for strategizing and decision-making to drive the company towards its goals.

Attention

The focused mental engagement on a particular item of information, object, or task, and the process of selectively concentrating on one aspect while ignoring others.

Divisional Profitability

A measurement of the financial performance of individual divisions or segments within a company, indicating their contribution to overall profit.