If a Freeze Destroys Oranges Before They Are Harvested,the Equilibrium

question 203

Multiple Choice

If a freeze destroys oranges before they are harvested,the equilibrium price of an orange ________ and the equilibrium quantity ________.

• A) rises; increases
• B) rises; decreases
• C) falls; increases
• D) falls; decreases
• E) does not change; decreases

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Definitions:

Acquisition

The process of obtaining control of another company or business entity through purchase or merger.

Consolidated Inventory

The aggregate amount of inventory held across all subsidiaries of a parent company, combined in the financial statements to present a total inventory figure for the entire corporate group.

Acquisition Business Combination

An event or transaction where one entity gains control over one or more companies.

Fair Values

The expected value from selling an asset or what it would cost to delegate a liability in an orderly exchange scenario with market participants on the designated assessment date.