Which of the Following Events Must Cause Equilibrium Quantity to Fall

question 30

Multiple Choice

Which of the following events must cause equilibrium quantity to fall?

• A)demand increases and supply decreases
• B)demand and supply both decrease
• C)demand decreases and supply increases
• D)demand and supply both increase

---

Definitions:

Break-even Point

The level of sales or production at which total revenues equal total costs, resulting in neither profit nor loss.

Contribution Margin

The selling price of a product minus the variable cost per unit, used to cover fixed costs and contribute to net profit.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a short time.

Variable Costs

Expenses which are dependent on the volume of activity within a business.