If the Supply Curve of a Good Shifts Increases and Decreases

question 20

Multiple Choice

If the supply curve of a good shifts increases and decreases cyclically along a relatively Inelastic (or steep) demand curve, then, in this market, the size of price fluctuations will Be __________ than the size of the quantity fluctuations.

• A) relatively less
• B) the same
• C) relatively greater
• D) relatively less or the same but not relatively greater

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Definitions:

Contra-Asset Account

A contra-asset account is an account used in a company's balance sheet to offset the balance of an associated asset account, reducing the net amount of both accounts.

Sales Returns

Transactions where customers return previously purchased merchandise, resulting in a subtraction from a business's gross sales.

Net Realizable Value

The amount of cash expected to be received from the sale of inventory, after deducting the costs necessary to make the sale.

Bad Debt

Accounts receivable that a company is unable to collect, representing a financial loss when customers fail to fulfill their payment obligations.