Assume the Market Depicted in the Graph Is in Equilibrium

question 3

Multiple Choice

Assume the market depicted in the graph is in equilibrium. If the market price is set to $6, which of the following statements is true?

• A) For those still interacting in the market, some surplus will be transferred from buyer to seller.
• B) For those still interacting in the market, some surplus will be transferred from seller to buyer.
• C) Producers will gain the surplus of those buyers who drop out of the market.
• D) Consumers will gain the surplus of those sellers who drop out of the market.

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Definitions:

Accepted Methods

Refers to officially recognized or sanctioned techniques or procedures used in a particular field or discipline.

Days' Sales In Inventory

A financial metric that measures the average number of days a company takes to sell its inventory.

Ending Inventory

The value of unsold goods at the end of an accounting period.

Inventory Management

The supervision and control of ordering, storing, and using a company's inventory, both raw materials and finished products.