Suppose a Competitive Market Has a Downward-Sloping Demand Curve and a Horizontal

question 166

Essay

Suppose a competitive market has a downward-sloping demand curve and a horizontal supply curve.If the supply curve shifts downward, what will happen to equilibrium price, equilibrium quantity, consumer surplus, and producer surplus?
A.decrease, increase, increase, decrease
B.decrease, decrease, increase, no change
C.decrease, increase, increase, no change
D.decrease, increase, no change, increase

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Definitions:

Ending Work

Refers to the value of work-in-process inventory at the end of an accounting period.

Activity-Based Costing

A method in accounting that assigns costs to products or services based on the activities required to produce or deliver them.

Overhead Costs

Indirect costs associated with operating a business, such as utilities, rent, and administrative expenses, not directly tied to a specific product or service.

Arbitrary Allocations

The distribution of costs based on criteria that may not precisely reflect the actual consumption or benefit of those costs.