The Decrease in the Price of Gasoline to a National

question 49

Multiple Choice

The decrease in the price of gasoline to a national average of less than $3.20 during the summer of 2012 was most likely a result of

• A)an increase in demand due to reduced summer driving.
• B)an increase in supply resulting from higher refinery output.
• C)an increase in demand due to increase in summer driving along with a decrease in supply resulting from reduced refinery output.
• D)an increase in supply resulting from higher refinery output along with a decrease in demand in summer driving.

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Definitions:

Quick-Ratio

A measure of a company's ability to meet its short-term obligations with its most liquid assets, calculated as (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities.

Common Size Income Statements

A financial statement in which all line items are expressed as a percentage of revenue, allowing for easy comparison across companies and time periods.

Revenues

The aggregate revenue from selling goods or providing services which constitute the core business activities.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.