Assume That Both the Demand Curve and the Supply Curve

question 58

Multiple Choice

Assume that both the demand curve and the supply curve for DVD players shift to the left but the supply curve shifts more than the demand curve.As a result

• A)both the equilibrium price and quantity of DVD players will decrease.
• B)the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease.
• C)the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will increase.
• D)the equilibrium price of DVD players will increase; the equilibrium quantity will decrease.

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Definitions:

Gross Profit

The difference between revenue and the cost of goods sold (COGS), indicating the efficiency of a company in using its labor and supplies.

Net Sales

Revenue from sales transactions after deducting returns, allowances for damaged or missing goods, and any discounts offered.

Income Summary

An account used in the closing process that summarizes the revenues and expenses for a specific accounting period.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues and expenses to show net profit or loss.