Assume That Both the Demand Curve and the Supply Curve

question 118

Multiple Choice

Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve.As a result

• A)both the equilibrium price and quantity of MP3 players will increase.
• B)the equilibrium price of MP3 players will increase; the equilibrium quantity may increase or decrease.
• C)the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will increase.
• D)the equilibrium price of MP3 players will decrease; the equilibrium quantity may increase or decrease.

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Definitions:

Periodic Inventory System

A system where inventory levels and the cost of goods sold are determined at the end of the accounting period through physical inventory counts.

Credit Memo

A document issued by a seller to a buyer, reducing the amount the buyer owes to the seller under previous transactions.

Freight Charges

Fees associated with the transport of goods from one place to another, paid by the sender or receiver.

Recent Goods

Recent goods refer to merchandise or products that have been newly received or produced, often highlighted for their novelty or relevance to current trends.