Consider the Following Demand and Supply Curves $Q ^ { \mathrm { d } } = 100 - 2 \mathrm { P }$

question 33

Multiple Choice

Consider the following demand and supply curves: $Q ^ { \mathrm { d } } = 100 - 2 \mathrm { P }$ , and $\mathrm { Q } ^ { s } = 1 / 2 \mathrm { P }$ , calculate the equilibrium $P$ and $Q$ for this initial situation and assuming the supply curve changes to $Q ^ { s } = 1 / 2 P$ $+ 10$ . Which of the following is correct?

• A) the initial equilibrium is \(P = 40 , Q = 20\) and the supply curve shifts left.
• B) the initial equilibrium is \(P = 40 , Q = 20\) and the new equilibrium is \(P = 36 , Q = 28\).
• C) the initial equilibrium is \(\mathrm { P } = 40 , \mathrm { Q } = 20\) and the new equilibrium remains the same.
• D) the initial equilibrium is \(P = 40 , Q = 20\) and the new equilibrium is \(P = 38 , Q = 28\).

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Definitions:

Intragroup Sale

Transactions of goods or services between companies within the same group, which may require elimination adjustments during consolidation.

Dividend Payable

A liability recorded on a company's balance sheet for dividends that have been declared but not yet paid to shareholders.

Dividend Receivable

The amount due to shareholders from declared dividends by the company in which they hold shares, recognized as an asset on the balance sheet until paid.

Elimination

The process of removing intercompany transactions when consolidating financial statements of a group.