Figure 4-9 -Refer to Figure 4-9.If There Is Currently a Shortage of a Shortage

question 444

Multiple Choice

Figure 4-9
-Refer to Figure 4-9.If there is currently a shortage of 20 units of the good,then

• A) the law of demand predicts that the price will rise by $2 to eliminate the shortage.
• B) the law of supply predicts that the price will rise by $2 to eliminate the shortage.
• C) the law of supply and demand predicts that the price will rise by $2 to eliminate the shortage.
• D) the law of supply and demand predicts that the price will fall by $2 to eliminate the shortage.

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Definitions:

Profit and Loss Statement

A financial report that summarizes the revenues, costs, and expenses incurred during a specified period, typically a fiscal quarter or year, showing the company's net profit or loss.

Common Fixed Costs

Costs that are not directly attributable to a specific product, service, or segment, but are shared among different parts of a business or project.

Contribution Margin

The amount of revenue remaining after deducting variable costs, contributing towards covering fixed costs and generating profit.

Variable Costs

Costs that change in proportion to the level of goods or services produced by a business.