Figure 3-8 -Refer to Figure 3-8.The Graph in This Figure Illustrates an This

question 92

Multiple Choice

Figure 3-8

-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₂ (point B) Assume that Motorcycles are a normal good. If there is an increase in number of companies producing motorcycles and a decrease in income (assume motorcycles are a normal good) , the equilibrium could move to which point?

• A) A
• B) B
• C) C
• D) E

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Definitions:

Straight-Line Depreciation

A method of calculating the depreciation of an asset evenly over its useful life, assigning a fixed expense amount to every accounting period.

Fixed Asset

A durable, physical asset that a company possesses and employs in its business activities to produce revenue.

Salvage Value

Salvage value is the estimated residual value of an asset at the end of its useful life, indicating how much the asset can be sold for after it is no longer useful for its intended purpose.

Estimated Life

The expected period over which an asset will be useful in the operations of a business.