When the Price of a Good Is Higher Than the Equilibrium

question 9

Multiple Choice

When the price of a good is higher than the equilibrium price,

• A)a shortage will exist.
• B)buyers desire to purchase more than is produced.
• C)sellers desire to produce and sell more than buyers wish to purchase.
• D)quantity demanded exceeds quantity supplied.

---

Definitions:

Work In Process

Items that are in the middle of the production process but not yet finished goods.

Physical Units

A measure of product expressed in terms of tangible units, such as pieces or gallons, rather than in monetary value.

Weighted Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the weighted average of all units available for sale.

Equivalent Units

A concept in cost accounting used to allocate costs to partially completed goods, converting them into an amount of fully completed units.