Figure 38 Alt Text for Figure 3

question 126

Multiple Choice

Figure 3.8 Alt text for Figure 3.8: In figure 3.8, a graph plotting intersecting supply and demand curves represents the market for canvas tote bags.
Long description for Figure 3.8: The x-axis is labelled, Quantity, with the values 0, 10, 20, 50, 75, and 100 marked.The y-axis is labelled, Price, with the values 0, 15, 25, and 50 dollars marked.Curve D is a straight line which slopes down from the top left corner to the bottom right corner.Curve S is a straight line which begins in the bottom left corner and slopes up to the top right corner.The equilibrium of the 2 curves is (50,25) .The point plotted on curve S to the left of equilibrium is (20,15) .The point plotted on curve D to the right of point of equilibrium is (75,15) .The point plotted to the right of equilibrium on curve S is (100,50) .The point plotted to the right of the equilibrium on curve D is (10,50) .
-Refer to Figure 3.8.The figure above represents the market for canvas tote bags.Assume that the price of tote bags is $15.At this price,

• A)the quantity demanded exceeds the quantity supplied of tote bags by 75.The price will eventually rise to $25 where quantity demanded will equal quantity supplied.
• B)the demand exceeds the supply of tote bags by 55.Some consumers will have an incentive to offer to buy tote bags at a higher price.
• C)there is a shortage, equal to 55 tote bags, that will be eliminated when the price rises to $25.
• D)there is a shortage equal to 55 tote bags; the price of tote bags will rise until demand is equal to supply.

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Definitions:

Accrued Expense

An accounting term for expenses that have been incurred but not yet paid, representing a company's obligation to make future payments.

Contra Account

An account in the general ledger that is used to reduce the value of a related account when the two are netted together.

Associated Account

An account linked or related to another in accounting, often used to track transactions connected to a specific business activity or party.

Plant Assets

Long-term tangible assets that are used in the production of goods or services and are not intended for sale.