If the Price of a Product Increases, Then

question 180

Multiple Choice

If the price of a product increases, then

• A) the budget line rotates and the optimal quantity demanded, which corresponds to the higher price, decreases.
• B) the budget line rotates and the optimal quantity demanded, which corresponds to the higher price, increases.
• C) the budget line shifts outward and the optimal quantity demanded, which corresponds to the higher price, decreases.
• D) the budget line shifts inward and the optimal quantity demanded, which corresponds to the higher price, increases.

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Definitions:

Retained Earnings

The portion of a company's profits that is saved or retained and not distributed among shareholders as dividends, often reinvested in business operations.

Footnote

A footnote in financial statements is an additional note provided at the bottom of a financial document, offering further explanation or disclosure about the figures presented.

Prior Period Adjustments

Adjustments made to correct errors in previously issued financial statements.

Net Income

The total earnings of a company after subtracting all expenses and taxes from total revenue, indicating profitability.