Consider a Market That Is in Equilibrium

question 14

Multiple Choice

Consider a market that is in equilibrium.If it experiences an increase in supply,what will happen?

• A)The supply curve will shift to the right and the equilibrium price and quantity will rise.
• B)The supply curve will shift to the right and the equilibrium price will decrease and the equilibrium quantity will increase.
• C)The supply curve will shift to the right and the equilibrium price and quantity will fall.
• D)The supply curve will shift to the left and the equilibrium price and quantity will fall.

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Definitions:

Materiality Principle

An accounting principle that states financial reports should include all items significant enough to influence the decision-making process of an individual reading the report.

Charging to Expense

The process of recognizing a cost as an expense in the income statement during the period in which it is incurred.

Historical Cost Principle

An accounting principle requiring all financial items to be recorded based upon original cost, without adjusting for inflation or market value.

Primary Quality

Fundamental or inherent characteristics that determine the value or usefulness of something.