Take a Deck of Playing Cards and Remove the Aces,jacks,queens,and

question 75

Multiple Choice

Take a deck of playing cards and remove the aces,jacks,queens,and kings.Imagine that any remaining card in the deck is a single individual,either a seller or a consumer,and all are gathered at a single perfectly competitive market.Red cards are sellers,and black cards are consumers.The number on a card indicates the individual's reservation price.Each seller owns a single unit of an indivisible good.Each consumer can buy at most one unit of the good from a seller.The invisible hand predicts that the market outcome will be ________.

• A) equilibrium price = 6, and units sold = 5
• B) equilibrium price = 6, and units sold = 10
• C) equilibrium price = 3, and units sold = 5
• D) equilibrium price = 5, and units sold = 6

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Definitions:

Inventory Planning

The process of determining the optimal quantity and timing of inventory for the purpose of aligning it with sales and production capacity.

Budgeted Purchases

The estimated amount of goods or raw materials a company plans to buy over a certain period based on its budget.

Credit Sales

Sales for which payment is not received at the time of sale but is expected to be received at a later date, typically documented through invoices.

Cash Receipts

Money received by a business during a given period, including revenue from sales, loan proceeds, and investment income.