If Equilibrium Price Increases While Equilibrium Quantity Decreases, Then We

question 126

Multiple Choice

If equilibrium price increases while equilibrium quantity decreases, then we know that:

• A) market demand has increased.
• B) market demand has decreased.
• C) market supply has decreased.
• D) market supply has increased.

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Definitions:

Accounting Profit

The difference between a firm's total revenue and its explicit costs, often reported in the financial statements.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the true profitability of a company.

Accounting Profit

The difference between the total revenue received from sales and the total explicit costs of a business.

Explicit Costs

Direct payments made to others in the course of running a business, such as wages, rent, and materials.