Which of the Following Is True

question 78

Multiple Choice

Which of the following is true?

• A) If demand decreases, equilibrium price increases.
• B) If demand increases, equilibrium price decreases.
• C) If demand decreases, the demand curve shifts to the left.
• D) If demand decreases, the demand curve shifts to the right.

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Definitions:

Annual Profit

Annual profit refers to the total profit a business earns over the course of a fiscal year, accounting for all revenues minus expenses during that period.

Variable Costs

Costs that vary directly with the level of production or service activity, such as materials and labor.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and loan payments.

Total Cost

The sum of all expenses incurred by a firm in producing goods or services, including both fixed and variable costs.