Assume the Most Typical Shapes for the Demand and Supply

question 176

Multiple Choice

Assume the most typical shapes for the demand and supply in a competitive market.Suppose that demand falls and supply increases.Which of the following statements is correct?

• A) The equilibrium price will fall;the equilibrium quantity may rise or fall.
• B) The equilibrium price will rise;the equilibrium quantity may rise or fall.
• C) The equilibrium quantity will fall;the equilibrium price may rise or fall.
• D) The equilibrium quantity will rise;the equilibrium price may rise or fall.
• E) The equilibrium price will fall;the equilibrium quantity will not change.

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Definitions:

Deficit

The amount by which expenses exceed income or liabilities surpass assets.

Retained Earnings Statement

A financial statement that shows the amounts of a company's profits that are kept within the business rather than paid out as dividends.

Corporation Income Statement

A financial statement that shows a company's revenues, expenses, and profits or losses over a specific time period.

Common Stockholders' Equity

The portion of a company's equity owned by common shareholders, calculated as total assets minus total liabilities and preferred stocks.