Figure: Supply and Demand 3 Which of the Following

question 52

Multiple Choice

Figure: Supply and Demand 3 Which of the following statements applies to the diagram?

• A) An increase in supply causes an increase in quantity demanded.
• B) A decrease in supply causes an increase in quantity demanded.
• C) An increase in supply causes an increase in demand.
• D) A decrease in supply causes a decrease in demand.

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Definitions:

Income Before Taxes

The total revenue of a business minus all expenses except for taxes, used to evaluate profitability before tax impact.

Operating Expenses

Expenses incurred during the normal course of business operations, including sales and marketing, research and development, and administrative expenses.

Gross Profit

The difference between revenue and the cost of goods sold (COGS), indicating the profit a company makes before deducting operating expenses.

Cost of Goods Sold

Costs directly connected to the assembly of products sold by a business, covering materials and labor expenses.