Consider a Market That Is in Equilibrium

question 70

Multiple Choice

Consider a market that is in equilibrium.If it experiences both a decrease in demand and an increase in supply,what can be said of the new equilibrium?

• A)The equilibrium price and quantity will both rise.
• B)The equilibrium quantity will definitely fall,while the equilibrium price cannot be predicted.
• C)The equilibrium price will definitely fall,while the equilibrium quantity cannot be predicted.
• D)The equilibrium price and quantity will both fall.

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Definitions:

Borrow

The act of receiving funds from another party under the agreement to return the principal amount along with interest.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, used to manage liquidity and ensure financial stability.

Capital Expenditures Budget

A budget allocated for long-term investments, such as buying new machinery, buildings, or technology, that will be used over time.

Budgeted Income Statement

A financial statement that estimates a company's revenue, expenses, and net income for a future period based on planned operations and strategies.