When a Market Is Not in Equilibrium

question 169

Multiple Choice

When a market is not in equilibrium:

• A)government intervention is required to achieve equilibrium.
• B)there is neither excess supply nor excess demand.
• C)the economic motives of sellers and buyers will move the market to its equilibrium.
• D)a change in either supply or demand is required to reestablish equilibrium.

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Definitions:

Sunk Cost

An expense that has already been incurred and cannot be recovered, which should theoretically not influence any future financial decisions or strategies.

Expensed

The act of charging costs to expense accounts, recognizing them in the income statement in the period they were incurred.

Operation

In a business context, operation refers to the day-to-day activities necessary for running a company, which can include production, distribution, and the provision of services.

CCA Deductions

Refers to Capital Cost Allowance deductions in taxation, allowing businesses to claim depreciation on tangible capital assets.