Figure 3-6 -Refer to Figure 3-6. the Figure Above Represents the Market

question 433

Multiple Choice

Figure 3-6
-Refer to Figure 3-6. The figure above represents the market for canvas tote bags. Assume that the market price is $35. Which of the following statement is true?

• A) There is a surplus that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25.
• B) There is a surplus that will cause the price to decrease; quantity supplied will then increase and quantity demanded will decrease until the price equals $25.
• C) There will be a surplus that will cause the price to decrease; demand will then increase and supply will decrease until the price equals $25.
• D) There is a surplus that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25.

---

Definitions:

Smaller Percentage

A proportionally less significant part or fraction of a whole, often used to compare relative sizes or amounts.

Interest Rate

A charge applied by lenders for loaning out assets, calculated as a fraction of the principal amount.

Exchange Rate

The price at which one country's currency can be exchanged for another country's currency.

Domestic Investment

Domestic investment pertains to the total amount of money spent on capital goods, services, and structures within a country.