If We Observe a Fall in the Equilibrium Price of Good

question 163

Multiple Choice

If we observe a fall in the equilibrium price of good A,we know that the demand for A has

• A)increased or the supply of A has decreased or both.
• B)increased or the supply of A has increased or both.
• C)decreased or the supply of A has increased or both.
• D)decreased or the supply of A has decreased or both.
• E)not changed.

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Definitions:

Capital Budgeting

The process businesses use to evaluate and select long-term investments that are expected to yield returns over a period of time.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a product or service.

Forecasted Cost

An estimate of the expenses that will be incurred on a project or by a company in a future period.

Average Cost

The total cost of goods available for sale divided by the total number of units available for sale, determining an inventory valuation.