FIGURE 3-6 -Refer to Figure 3-6. If the Demand Curve Shifts from Shifts

question 90

Multiple Choice

FIGURE 3-6
-Refer to Figure 3-6. If the demand curve shifts from D1 to D2, while supply remains at S1, one could say that

• A) the quantity demanded has decreased to Q1 and price has fallen to P2.
• B) there has been an increase in demand for X.
• C) the price of a good which is a substitute for X must have fallen.
• D) the price increase has caused an increase in quantity demanded.
• E) there is now an excess demand at the new price of P1.

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Definitions:

Utilities Expense

The cost incurred from the consumption of utility services such as electricity, water, and gas in the business operations.

Income Summary Account

An account used in closing entries to gather all income and expense items, facilitating the transfer of their net balance to retained earnings.

Expense Accounts

Accounts used to record the costs incurred to operate a business, which are then matched against revenues to determine net income.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been deducted from total revenue.