Use the Figure Below to Answer the Following Questions

question 164

Multiple Choice

Use the figure below to answer the following questions.

Figure 3.4.1
-At price P1 in Figure 3.4.1

• A)there is a surplus in the amount of Q4 - Q2.
• B)there is a shortage in the amount of Q4 - Q2.
• C)there is a tendency for the price to fall.
• D)the equilibrium quantity is Q2.
• E)the equilibrium quantity is Q4.

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Definitions:

Outside Supplier

An external entity that provides goods or services to a company, often used when the company cannot produce these items in-house.

Transfer Price

The price one segment of an organization charges for a product or service supplied to another segment of the same organization.

Variable Expenses

Costs that fluctuate with changes in production volume or business activity levels, such as raw materials and sales commissions.

Selling Costs

Expenses incurred directly and indirectly from the sale of products or services, such as advertising and sales personnel salaries.