Figure 3.6 -Refer to Figure 3.6.The Figure Above Represents the Market for the Market

question 91

Multiple Choice

Figure 3.6
-Refer to Figure 3.6.The figure above represents the market for canvas tote bags.Compare the conditions in the market when the price is $50 and when the price is $35.Which of the following describes how the market differs at these prices?

• A)At each price there is a surplus; the surplus is greater at $35 than at $50.
• B)The difference between quantity supplied and quantity demanded is greater at $50 than at $35.
• C)At each price there is a surplus; firms will lower the equilibrium price in order to eliminate the surplus.
• D)At each price the supply of tote bags exceeds the demand for tote bags.

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Definitions:

Return on Investment

A financial metric used to measure the profitability or efficiency of an investment, calculated by dividing net profit by the initial cost of the investment.

Minimum Required Return

This refers to the smallest expected or necessary rate of return on an investment to make it worthwhile.

Transfer Price

The amount levied on goods or services traded across sections or sister companies within the same organization.

Motor Division

A sector or unit within a company that specializes in the development, production, and marketing of motor vehicles or engine components.