Which of the Following Occurs When a Shortage Occurs in the Market

question 90

Multiple Choice

Which of the following occurs when a shortage occurs in the market for a good?

• A) Quantity demanded exceeds quantity supplied and the market mechanism pushes the price up, which in turn encourages more production and less consumption.
• B) Quantity supplied exceeds quantity demanded and the price falls, which encourages more production and less consumption.
• C) Quantity demanded exceeds quantity supplied and the market mechanism pushes the price down, which encourages more production and less consumption.
• D) Quantity supplied exceeds quantity demanded and the price rises, which encourages more production and less consumption.

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Definitions:

Return on Assets

A financial ratio that measures the efficiency of a company in generating profit from its assets.

Basic Earnings Per Share

A financial metric that calculates the amount of net income earned per share of stock outstanding.

Common Dividends

Dividends that are paid out to holders of common shares from a company's earnings, often fluctuating with the company's profitability.

Basic Earnings Per Share

A measure of a company's profitability calculated by dividing the net income by the average number of common shares outstanding.