A Decrease in Supply Will Cause the Smallest Increase in Price

question 33

Multiple Choice

A decrease in supply will cause the smallest increase in price when

• A)both supply and demand are inelastic.
• B)demand is elastic and supply is inelastic.
• C)both supply and demand are elastic.
• D)demand is inelastic and supply is elastic.

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Definitions:

Net Fixed Assets

Assets with a physical form that are held by a company for long-term use, minus depreciation.

Average Collection Period

How long, on average, it takes for a business to get paid by its customers.

Days' Sales In Inventory

A financial measure indicating the average time in days that a company takes to turn its inventory into sales.

Total Current Assets

The sum of all assets that are expected to be converted into cash, sold, or consumed within one year or during the normal operation cycle of the business, whichever is longer.