Figure 3-8

question 119

Multiple Choice

Figure 3-8
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A) .If the price of oranges,a substitute for apples,decreases and the wages of apple workers increase,how will the equilibrium point change?

• A)The equilibrium point will move from A to E.
• B)The equilibrium point will move from A to B.
• C)The equilibrium point will move from A to C.
• D)The equilibrium will first move from A to B,then return to A.

---

Definitions:

Planning Budget

A budget developed at the beginning of the budgeting period that is based on projected levels of activity.

Selling

Expenses incurred directly and indirectly in making sales, including advertising, sales commissions, and the cost of sales personnel.

Administrative Expenses

Overhead or indirect costs related to the general operation of a company, such as office supplies, legal fees, and management salaries.

Planning Budget

A financial plan that estimates the revenues and expenditures for a certain period of time in advance.