If the Supply of Product X Is Perfectly Elastic, an Increase

question 360

Multiple Choice

If the supply of product X is perfectly elastic, an increase in the demand for it will increase

• A)equilibrium quantity but reduce equilibrium price.
• B)equilibrium quantity, but equilibrium price will be unchanged.
• C)equilibrium price but reduce equilibrium quantity.
• D)equilibrium price, but equilibrium quantity will be unchanged.

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Definitions:

Indirect Method

An approach to preparing the cash flow statement where the net income is adjusted for non-cash transactions and changes in working capital to estimate cash flows from operating activities.

Cash Dividends

A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders in the form of cash.

Long-Term Investments

Assets that a company intends to hold for more than one year, including stocks, bonds, and real estate.

Bonds Retired

The process of redeeming bonds before their maturity date, effectively removing them from circulation.