Which One of the Following Correctly Describes How Price Adjustment

question 147

Multiple Choice

Which one of the following correctly describes how price adjustment eliminates a shortage?

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

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Definitions:

Net Operating Income

The profit a company generates from its regular business activities, excluding deductions for interest and taxes.

Units

A measurement or quantity of something considered as a standard measure, in business often referring to a single item of a product.

Planning Budget

A budget prepared for a particular level of activity, often used as a benchmark for evaluating actual performance.

Selling

The process of promoting and transferring goods or services to the customer in exchange for payment.