In the Short Run, If Prices Were Above Equilibrium

question 77

Multiple Choice

In the short run, if prices were above equilibrium,

• A) excess aggregate demand for goods and services would place downward pressure on prices.
• B) excess aggregate supply of goods and services would place upward pressure on prices.
• C) excess aggregate demand for goods and services would place upward pressure on prices.
• D) excess aggregate supply of goods and services would place downward pressure on prices.

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Definitions:

Bad Debt Expense

An expense reported on the income statement, representing the value of accounts receivable deemed non-collectible.

Accounts Receivable

Amounts owed to a company by customers for goods or services that have been delivered or used but not yet paid for.

Net Income

The residual income of a business following the subtraction of all taxes and costs from the total revenue.

Gross Profit

The financial metric calculated as sales revenue minus the cost of goods sold, indicating the efficiency of a company in producing and selling its goods.