You Are Asked to Determine, Other Things Equal, the Effects

question 282

Multiple Choice

You are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product Xupon (1) the demand (D) for, or supply (S) of, X, (2) the equilibrium price (P) of X and (3) the equilibrium quantity (Q) of X.Refer to the above.An increase in the price of a product which is a complement (in consumption) to X will:

• A)decrease S, decrease P, and decrease Q.
• B)increase D, increase P, and increase Q.
• C)decrease D, decrease P, and decrease Q.
• D)increase D, increase P, and decrease Q.

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Definitions:

Services on Account

A method where businesses provide services to a customer and allow them to pay at a later time, recording the transaction as account receivable.

Operating Expense

Refers to the costs associated with the day-to-day operations of a business, excluding costs related to production.

Receivables

Amounts due to be paid to a company by its customers for goods or services delivered on credit terms.

Bad Debt Expense

The expense recognized when a business determines that an amount owed by a debtor is unlikely to be collected.