An Increase in Demand Will Always

question 137

Multiple Choice

An increase in demand will always

• A)increase producer surplus.
• B)increase producer surplus and increase consumer surplus.
• C)decrease consumer surplus and increase consumer surplus.
• D)increase consumer surplus.

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Definitions:

Forgoing

The act of giving up or going without something, often in the context of making financial or investment decisions.

Discount

A reduction from the usual cost of something, or in finance, the process of determining the present value of future cash flows by applying a discount rate.

Minimum Compensating Balance

The lowest balance that a business must maintain in its bank account as a requirement for banking services or loans.

Line-Of-Credit

A financial arrangement in which a bank or other lender provides a maximum loan amount that the borrower can draw from as needed, but does not exceed over a specified period.