Exhibit 3-8 Refer to Exhibit 3-8. a Price of $5 Will Result

question 183

Multiple Choice

Exhibit 3-8
Refer to Exhibit 3-8. A price of $5 will result in a ___________________ in this market which will cause the price of the product to gravitate _______________.

• A)shortage; downward
• B)shortage; upward
• C)surplus; downward
• D)surplus; upward

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Definitions:

Cash Investment

Funds that are invested in assets that can be quickly turned into cash, or the act of putting money into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit.

Equipment Sale

The process of selling off business-owned equipment, either to upgrade to newer assets or to liquidate assets for cash.

Cash Dividend

A payment made by a company out of its earnings to its shareholders in cash.

Financing Activities

Transactions that involve raising funds to finance the company's operations and repaying debt; part of a firm's financial operations detailed on the statement of cash flows.