What Happens When the Price of a Good or Service

question 120

Multiple Choice

What happens when the price of a good or service changes?

• A) Supply shifts in the opposite direction.
• B) Demand shifts in the opposite direction.
• C) Demand shifts in the same direction.
• D) There is a movement along a stable demand curve.

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Definitions:

Current Ratio

The current ratio is a liquidity ratio that measures a company's ability to cover its short-term obligations with its current assets.

Current Liabilities

Obligations a company must pay within a year, including accounts payable, short-term loans, and accrued expenses.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle, whichever is longer.

Accounts Receivable

Funds that customers owe to a business for products or services already provided but not yet compensated for.