Suppose That Two Concurrent Changes Occur in Each of the Following

question 105

Essay

Suppose that two concurrent changes occur in each of the following four different markets.What will happen to price and quantity traded in each case?
Changes affecting demand
1.The price of a substitute product decreases.
2.Incomes increases.
Changes affecting supply
A.The price of inputs decrease.
B.The number of suppliers decreases.
a)Changes 1 and A for a normal product.
b)Changes 2 and B for an inferior product.
c)Changes 2 and A for a normal product.
d)Changes 1 and B for a normal product.
a)price decrease and quantity indeterminate
b)price indeterminate and quantity decrease
c)price indeterminate and quantity increase
d)price indeterminate and quantity decrease

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Definitions:

Cash Sales

Revenue generated from transactions where payment is made in cash immediately upon purchase.

Supplies Expense

Supplies Expense represents the cost consumed in the use of supplies, such as office supplies, during a reporting period.

Rent Expense

the cost incurred by a company to utilize property or equipment for business operations, typically recognized over the lease term.

Income Before Taxes

An entity's earnings before tax is assessed, representing the profit generated from all operations before tax expenses.