Figure: Supply and Demand 2 What Happens as a Result

question 8

Multiple Choice

Figure: Supply and Demand 2 What happens as a result of the change in demand in the diagram?

• A) a decrease in both the equilibrium price and the equilibrium quantity
• B) an increase in both the equilibrium price and the equilibrium quantity
• C) an increase in the equilibrium price and a decrease in the equilibrium quantity
• D) a decrease in the equilibrium price and an increase in the equilibrium quantity

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Definitions:

Opportunity Costs

The financial impact of bypassing the alternative that ranks immediately lower in preference while making a choice.

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating the short-term financial health of the business.

Accounts Receivable

Money owed to a company by its debtors for goods or services that have been delivered or used but not yet paid for.

Accounts Payable

The amount of money owed by a company to its creditors for goods and services purchased on credit, typically due within a short period of time.