An Increase in Demand Will Increase Equilibrium Price to a Greater

question 72

Multiple Choice

An increase in demand will increase equilibrium price to a greater extent

• A)if the product is a normal good.
• B)if the product is an inferior good.
• C)the less elastic the supply curve.
• D)the more elastic the supply curve.

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Definitions:

Quantity Discount

A reduced price for items purchased in large quantities.

Order Quantity

The amount of an item that is ordered from a supplier to replenish inventory or to fulfill customer demand.

Inventory Carrying Cost Rate

The total cost associated with holding inventory over a given period, often expressed as a percentage of the inventory value, including costs related to storage, insurance, taxes, and depreciation.

Reams

A measure of paper quantity, traditionally consisting of 500 sheets of paper.