QUESTION: 41

If the price of a good is above the equilibrium price, which of the following will happen?

The quantity demanded is equal to the quantity supplied and the price remains unchanged
There is a shortage (i.e. an excess demand) and the price will fall
There is a surplus (i.e. an excess supply) and the price will rise
There is a surplus (i.e. an excess supply) and the price will fall

Answer(s): D

Explanation:

In microeconomics, equilibrium price is determined when the quantity demanded is equal to the quantity supplied at equilibrium price in a market, there will be no shortages and no surpluses. If we combine our supply and demand curves on one graph, the point at which they converge determines the equilibrium price. If the price is set above this price and you read across the graph you will see the supply excess demand and there will be a surplus. In order to reduce this surplus, the price will need to fall. The scenario is illustrated in the graph below:

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QUESTION: 42

How contribution is calculated in break-even analysis?

Fixed costs divided by variable costs
Variable costs subtracted from price
Price minus fixed costs
Variable costs subtracted from fixed costs

Answer(s): B

Explanation:

Contribution = Price - Variable cost
Break-even point (volume) = Fixed cost/Contribution

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QUESTION: 43

Which of the following should be adopted to minimise the conflict between parties in commercial negotiation?

The rule of law
Ground zero
Ground beam
Ground rules

Answer(s): D

Explanation:

Ground rules are the basic rules for doing something (Cambridge Dictionary). A negotiation goes more smoothly if ground rules are adopted. Then if something goes awry at a later time, you can point out the ground rule that has been violated. Procurement professional should seek to minimise conflict over process through agreeing 'ground rules' and approach as far as possible with the other party in advance of any negotiation meetings.
There should be two sets of ground rules: 1) ground rules for the negotiations between the two parties and 2) ground rules for the negotiating team itself. This article is about the negotiating team ground rules.
The rule of law is the condition in which all members of society, including its political leaders, accept the authority of the law.
Ground zero describes the point on the Earth's surface closest to a nuclear detonation. In the case of an explosion above the ground, ground zero refers to the point on the ground directly below the nuclear detonation.
The Ground Beam is the beam which is provided usually at the foundation level to support building walls, joists, etc.

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QUESTION: 44

A buying organisation with a low spend and the reputation for paying late might be viewed by a supplier as which of the following?

Develop
Nuisance
Core
Exploit

Answer(s): B

Explanation:

To answer this question, you should know The seller's perspective as in 'How to Negotiate Professionally':

In the scenario, the buyer's spend is low, while they seem unattractive to seller (as they tend to pay late). So the buyer is classified as Nuisance in seller's perspective.

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QUESTION: 41

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