Use the Information Below to Answer the Following Questions

question 4

Multiple Choice

Use the information below to answer the following questions.
Fact 12.1.1 Money in the Bank
Two gas stations stand on opposite sides of the road: Rutter's Farm Store and Sheetz gas station. Rutter's doesn't even have to look across the highway to know when Sheetz changes its price for gas. When Sheetz raises the price, Rutter's pumps are busy. When Sheetz lowers prices, there's not a car in sight. Both gas stations survive but each has no control over the price.
Source: The Mining Journal, May 24, 2008
-Refer to Fact 12.1.1. The price of gasoline is determined by ________. The marginal revenue from gasoline equals ________.

• A)the quantity of gasoline that Rutter's and Sheetz sells; average variable cost
• B)the number of tourists who drive by Rutter's and Sheetz; average fixed cost
• C)the other goods and services that Rutter's and Sheetz sell; average total cost
• D)market demand and market supply; price
• E)the price elasticity of demand of gasoline; the change in total revenue that occurs when the price of a litre of gasoline rises by an incremental amount

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Definitions:

Probable Likelihood

The significant chance or high probability that an event will occur, often used in risk assessment.

Quick Ratio

A liquidity metric that indicates a company's capacity to pay off its short-term liabilities with quick assets (cash, marketable securities, and receivables).

Interest Calculations

The process of determining the cost of borrowing money or the gain on saved or invested money over a period, typically expressed as a percentage of the principal.

Journalize

The process of recording transactions in a journal or diary in accounting, which includes the date, accounts affected, and amounts, followed by a brief description of the transaction.