In the Following Graph, Q_S and Q_D Represent the Supply

question 43

Multiple Choice

In the following graph, Q_S and Q_D represent the supply and the demand curves respectively. Refer to the graph to answer the question.
If the minimum price of the good is set at £2, which of the following is likely to happen?

• A) The minimum price will not affect quantity demanded or supplied as it is set above the equilibrium price.
• B) The total quantity of the good bought and sold in the market will be equal to 200 units.
• C) There will be a surplus of 200 units in the market.
• D) The imports of the good will increase.

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Definitions:

Debit Balance

An account balance that occurs when the total of debits in an account exceeds the total of credits, typical for asset and expense accounts.

Bad Debt Expense

An expense recognized by businesses for accounts receivable that are considered unrecoverable and written off.

Net Credit Sales

The total value of sales made on credit minus any returns or allowances, indicating the actual revenue generated from credit transactions.

Allowance Method

An accounting technique used to adjust accounts receivable for debts that are expected not to be collected.