If the Demand for CD Players Decreases and the Supply

question 126

Multiple Choice

If the demand for CD players decreases and the supply of CD players decreases, then

• A)it is clear that prices will decrease, the change in the quantity of CD players sold is ambiguous.
• B)it is clear that prices will increase, the change in the quantity of CD players sold is ambiguous.
• C)it is clear that quantity sold will decrease, the change in the price of CD players is ambiguous.
• D)it is clear that change in quantity sold is ambiguous, the change in the price of CD players is ambiguous.

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Definitions:

Scrap Value

The projected value of an asset when it reaches the end of its operational life.

Net Operating Income

A measure of a company's profitability from regular business operations, excluding deductions of interest and taxes.

Payback Period

The time required for an investment to generate cash flows sufficient to recover the initial investment cost.

Scrap Value

The estimated resale value of an asset at the end of its useful life, also known as salvage value.