Interpret the Following Statement: "An Increase in the Price of Wheat

question 4

Multiple Choice

Interpret the following statement: "An increase in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market."

• A) The statement is correct.
• B) The statement would be correct if "quantity of wheat demanded" were substituted for "quantity of wheat supplied."
• C) The statement is incorrect because it confuses a change in quantity supplied with a change in supply.
• D) The statement would be correct if it read that a "decrease in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market."

---

Definitions:

Carrying Value

Also known as book value, it's the amount at which an asset is recognized on the balance sheet after deducting accumulated depreciation or amortization.

Dividend Distributions

Dividend distributions are payments made by a corporation to its shareholders, usually derived from the company’s earnings, representing a portion of the profits.

Investee

An entity in which an investor holds an interest, where the investor has significant influence but not full control or ownership.

Periodic Net Income

The profit or loss reported by a company at the end of a specific accounting period, reflecting all revenues and expenses.