Figure: Supply Shift in the Figure, the Supply Curve

question 239

Multiple Choice

Figure: Supply Shift In the figure, the supply curve shifted from S₀ to S₁. To describe this movement, we would say that:

• A) demand decreased, which caused a decrease in supply.
• B) supply decreased, which caused a decrease in quantity demanded.
• C) supply decreased, which caused a decrease in demand.
• D) supply increased, which caused a decrease in quantity demanded.

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Definitions:

Contra Asset Account

An account that is used to reduce the balance of a related asset account to reflect its adjusted carrying value.

Credit Balance

The amount that a company or individual owes to creditors; in accounting, it indicates a balance on the right side of a ledger for liability, revenue, or equity accounts.

Closing Entries

Journal entries made at the end of an accounting period to transfer balances from temporary to permanent accounts.