In a Market Economy

question 433

Multiple Choice

In a market economy,

• A)supply determines demand and demand, in turn, determines prices.
• B)demand determines supply and supply, in turn, determines prices.
• C)the allocation of scarce resources determines prices and prices, in turn, determine supply and demand.
• D)supply and demand determine prices and prices, in turn, allocate the economy's scarce resources.

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Definitions:

Revenues

The total income generated by a company from its business activities, typically from the sale of goods or services before any expenses are subtracted.

Expenses

Outflows of resources or incurrences of liabilities that a company undergoes as part of its operations to generate revenue.

Drawings

It refers to the amount of money or the value of goods taken from the business by the owner for personal use.

Withdrawal Of Cash

The act of taking out cash from a business by the owners for personal use.