Which of the Following Describes the Difference Between "Scarcity" and "Shortage

question 150

Multiple Choice

Which of the following describes the difference between "scarcity" and "shortage"?

• A)There is no difference; either word can be used to describe the situation that exists when there is less of a good or service available than people want.
• B)In the economic sense,almost everything is scarce.A shortage of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price.
• C)There is a shortage of almost everything.Scarcity occurs only if the quantity demanded of a good or service is greater than the quantity supplied at the current market price.
• D)In the economic sense,almost everything is scarce.A shortage of a good or service occurs when the quantity demanded is greater than the quantity supplied at the equilibrium price.

Analyze the effects of fixed and variable costs on a company's financial performance.

Determine the effects of pricing and marketing decisions on a company's profitability.

Calculate the break-even point in both units and dollar sales.

Apply contribution format income statements to decision-making scenarios.

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Definitions:

Commercial Substance

A concept that an economic transaction has a significant impact on the future cash flows of a company, justifying its recognition.

Plant Assets

Long-term tangible assets, such as buildings, machinery, and equipment, used in the operation of a business and not intended for resale.

Exchanges

Transactions where goods, services, or assets are traded between two parties without the primary use of money, also can refer to platforms that facilitate these trades.

Extraordinary Repairs

Significant repairs that extend the useful life of an asset far beyond the current accounting period, often involving major overhaul or reconstruction.