Last Year a Firm Made 1,000 Units of Its Good

question 23

Multiple Choice

Last year a firm made 1,000 units of its good available at a price of $5 per unit. This year, the firm will still make 1,000 units available, but only if the price is $7 per unit. What has most likely happened?

• A) Supply has increased.
• B) Supply has decreased.
• C) Demand has decreased.
• D) Demand has increased.
• E) Quantity supplied has decreased.

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Definitions:

Common Stock

Equity securities that represent ownership in a company, providing voting rights and a share in the company’s profits through dividends.

Equity Method

A method of accounting for investments, where the investor recognizes its share of investee's profits and losses in its own income statement, typically used when the investor has significant influence over the investee.

Noncontrolling Interest

The portion of equity in a subsidiary held by investors other than the parent company, representing a minority stake that does not give its holders control over the company.

Intra-entity Purchases

Buying activities of goods or services conducted between departments or divisions within the same entity.