If the Price in a Market Is Above Its Equilibrium

question 97

Multiple Choice

If the price in a market is above its equilibrium level, there will be a:

• A) surplus and downward pressure on price.
• B) surplus and upward pressure on price.
• C) shortage and downward pressure on price.
• D) shortage and upward pressure on price.

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Definitions:

Readily Marketable

Items or securities that are readily marketable can be quickly sold in the market without significantly affecting their price.

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell products, and receive cash from sales, representing the full cycle of a business's operations.

Short-Term Investments

Investments typically expected to be converted into cash within one year, such as stocks or bonds.

GAAP

GAAP stands for Generally Accepted Accounting Principles, which are a collection of commonly-followed accounting rules and standards used in the United States for financial reporting.