When There Is a Decrease in Supply, All Else Held

question 69

Multiple Choice

When there is a decrease in supply, all else held equal,

• A)equilibrium price falls, demand increases, and equilibrium quantity increases.
• B)equilibrium price falls, demand does not change, and equilibrium quantity increases.
• C)equilibrium price rises, quantity demanded decreases, and equilibrium quantity decreases.
• D)equilibrium price falls, quantity demanded decreases, and equilibrium quantity decreases.
• E)equilibrium price rises, demand does not change, and equilibrium quantity increases.

Understand and apply the concept of discounting notes receivable and the calculation of proceeds from discounted notes.

Identify and record journal entries for transactions dealing with the purchasing and selling of goods on account and their subsequent settlement with notes.

Analyze and calculate the discount period and its impact on note transactions.

Understand the impact of discounting a note on a company's liabilities and how it affects the financial statements.

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Definitions:

Variable Costs

Costs that change in proportion to the level of goods or services that a business produces.

High-Low Method

The high-low method is a way of estimating the variable and fixed costs of a business by analyzing the highest and lowest levels of activity and their corresponding costs.

Machine Maintenance

The routine or preventive care given to machinery and equipment to keep them running efficiently and to avoid any unplanned downtime or failures.

Mixed Cost

A cost composed both of variable and fixed elements, where part of the expense varies with the level of output while the rest remains constant.