Refer to the Graph Shown

question 84

Multiple Choice

Refer to the graph shown. If product demand increases from D₁ to D₂, the equilibrium price of the product will:

• A) increase from P₁ to P₂ and equilibrium quantity will increase from Q₁ to Q₂.
• B) increase from P₁ to P₂ and equilibrium quantity will decrease from Q₂ to Q₁.
• C) decrease from P₂ to P₁ and equilibrium quantity will increase from Q₁ to Q₂.
• D) decrease from P₂ to P₁ and equilibrium quantity will decrease from Q₂ to Q₁.

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Definitions:

Days in Receivables

Days in Receivables, often referred to as Days Sales Outstanding (DSO), measures the average number of days it takes a company to collect payment after a sale has been made.

Accounts Receivable

This term refers to the money that is owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Credit Sales

Sales made by a business where payment is delayed, allowing the buyer to purchase goods or services on credit.

Month of Sale

The specific month in which a sale transaction was completed or recognized for accounting or reporting purposes.