With a Downsloping Demand Curve and an Upsloping Supply Curve

question 150

Multiple Choice

With a downsloping demand curve and an upsloping supply curve for a product, an increase in consumer income will

• A) increase equilibrium price and quantity if the product is a normal good.
• B) decrease equilibrium price and quantity if the product is a normal good.
• C) have no effect on equilibrium price and quantity.
• D) reduce the quantity demanded but not shift the demand curve.

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Definitions:

Contribution Format

A way of presenting a profit and loss statement where costs are separated into variable and fixed, and the contribution margin is highlighted.

Target Profit

The goal set for the amount of net income a company plans to achieve at a specific time.

Units Sold

The quantity of product units that have been sold during a particular time period.

Contribution Format

The contribution format is a financial statement layout that separates fixed and variable costs, allowing for easier calculation of contribution margin and breakeven analysis.