Figure 7-22 -Refer to Figure 7-22.Assume Demand Increases,which Causes the Equilibrium Price

question 96

Multiple Choice

Figure 7-22
-Refer to Figure 7-22.Assume demand increases,which causes the equilibrium price to increase from $50 to $70.The increase in producer surplus would be

• A)$2,500.
• B)$900.
• C)$800.
• D)$1,600.

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Definitions:

Collateral

An asset that a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.

Allowance Method

An accounting technique used to estimate and account for bad debts or uncollectible accounts receivable.

Bad Debts

Accounts receivable that a company considers uncollectible and writes off as a loss in its financial statements.

Sales

The transactions involving the exchange of goods or services for money.