What Is the Effect of a Decrease in the Price

question 180

Multiple Choice

What is the effect of a decrease in the price of potato chips on the market for pretzels?

• A)Both equilibrium price and equilibrium quantity rise.
• B)Both equilibrium price and equilibrium quantity fall.
• C)Equilibrium price rises and equilibrium quantity falls.
• D)Equilibrium price falls and equilibrium quantity rises.
• E)Equilibrium price and equilibrium quantity remain unchanged.

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Definitions:

Credit Sales

Sales made on credit, where the payment is received after the delivery of goods or services.

Cash Budget

A forecast of cash inflows and outflows over a specific period, used to manage the company's cash flow and ensure financial stability.

Cash Disbursements

Financial transactions involving the outflow of cash, typically from an entity to vendors or employees, for expenses or purchases.

Beginning Cash Balance

The Beginning Cash Balance is the amount of cash that a company has at the start of a new accounting period, carried over from the end of the previous period.