If the Price of a Product Is Below Equilibrium,which of the Following

question 102

Multiple Choice

If the price of a product is below equilibrium,which of the following statements is true?

• A)The quantity demanded will exceed the quantity supplied.
• B)The quantity supplied will exceed the quantity demanded.
• C)A surplus of the product exists.
• D)None of the choices are correct.

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Definitions:

Depreciation

The accounting entry allocating the cost of a long-lived asset against income over the asset’s life. Depreciation is a noncash charge, so net income is generally less than true cash flow by at least the amount of depreciation.

Opportunity Costs

The cost of foregoing the next best alternative when making a decision.

Financing Costs

Expenses a company pays to borrow funds or raise capital through equity, including interest payments, fees, and other charges.

Depreciation Costs

The allocation of the cost of an asset over its useful life, reflecting the decrease in value due to wear and use.