If the Price of a Pizza Increases and the Demand

question 152

Multiple Choice

If the price of a pizza increases and the demand curve for pizza does not shift, then the consumer surplus from pizza will ________.

• A) increase
• B) decrease
• C) equal the producer surplus if the market produces the efficient quantity of pizza
• D) remain the same

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Definitions:

Depreciable Asset

A tangible or intangible asset subject to depreciation, representing its loss in value over time due to usage or obsolescence.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset over its useful life, reducing its initial cost to its current book value.

Book Value

The value of an asset as recorded on a company's balance sheet, calculated as its cost minus accumulated depreciation.

Adjusting Entry

An accounting journal entry made to update the accounts and reflect the correct financial position before financial statements are prepared.