Consider a Market That Is in Equilibrium

question 86

Multiple Choice

Consider a market that is in equilibrium. If the market experiences an increase in supply:

• A) the equilibrium price and quantity will rise.
• B) the equilibrium price will fall and the equilibrium quantity will rise.
• C) the equilibrium price and quantity will fall.
• D) the equilibrium price will rise and the equilibrium quantity will fall.

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Definitions:

Seller

An individual or entity that offers goods or services in exchange for payment.

Financial Statement

Publications detailing a corporation's financial health, encapsulating the balance sheet, income statement, and cash flow statement.

Normal Balance

The side of an account (debit or credit) where increases are recorded, depending on the account type (asset, liability, equity, revenue, expense).

Temporary/Permanent

In accounting, this distinction categorizes accounts based on their persistence; temporary accounts reset each cycle, while permanent accounts carry their end balance into the next period.