An Increase in Demand and a Decrease in Supply Occur

question 147

Multiple Choice

An increase in demand and a decrease in supply occur in a market. What happens to the equilibrium price and quantity?

• A) The equilibrium price decreases; the change in the equilibrium quantity is uncertain.
• B) The equilibrium price decreases; the equilibrium quantity increases.
• C) The equilibrium price increases; the change in the equilibrium quantity is uncertain
• D) The equilibrium price increases; the equilibrium quantity decreases.

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Definitions:

Indirect Method

A technique used in comprehensive cash flow statements, it adjusts net income for non-cash transactions and changes in working capital to calculate net cash from operating activities.

Cash Flow Statement

A financial report that provides a summary of the cash inflows and outflows for a business over a specific period.

Marketable Securities

Financial instruments and assets that can be easily translated into cash because they have high liquidity and short maturities.

Accounts Receivable

Money owed to a company by its customers for products or services provided on credit.