When There Is a Shortage in the Market, Competition Will

question 90

Multiple Choice

When there is a shortage in the market, competition will:

• A) drive the price down to the equilibrium price.
• B) drive the price up to the equilibrium price.
• C) cause the demand curve to shift right.
• D) cause the supply curve to increase.

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Definitions:

Operating Cash Flow

Cash generated from a company's normal business operations, indicating whether a company can generate sufficient positive cash flow to maintain and grow its operations.

EBIT

Stands for Earnings Before Interest and Taxes, a financial metric that calculates a company's profitability from its core operations, excluding the effects of financing and tax environments.

Taxes

Compulsory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Packing Machines

Equipment used in various industries for the purpose of packaging products into containers, bags, or other formats for distribution.