A Decrease in the Demand for Bananas with No Concurrent

question 33

Multiple Choice

A decrease in the demand for bananas with no concurrent change in the supply of bananas will result in a ________ equilibrium price and a(n) ________ equilibrium quantity.

• A)higher; lower
• B)lower; lower
• C)higher; unchanged
• D)higher; higher

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Definitions:

Allowance for Doubtful Accounts

An accounting method that reduces accounts receivable on a company's balance sheet by estimating the amount of receivables that will not be collected.

Uncollectible Receivables

Debts owed to a company that are considered unlikelihood to be collected.

Bad Debt Expense

Unrecoverable amounts from accounts receivable representing financial losses for a company.

Direct Write-off Method

An accounting practice where actual bad debts are written off against income at the time they are identified as irrecoverable.