If Both Demand and Supply Rise,which of the Following Must

question 40

Multiple Choice

If both demand and supply rise,which of the following must be true?

• A) The equilibrium price will increase.
• B) The equilibrium price will decrease.
• C) The equilibrium price will not change.
• D) The change in the equilibrium price is indeterminate.

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Definitions:

Residual Dividend Policy

A strategy where dividends are paid out of the remaining net income after meeting the company's investment needs.

Target Capital Structure

Target capital structure is the mix of debt, preferred stock, and common equity that a company aims to maintain to finance its operations and fund its growth.

Net Income

The final amount a company earns, post all deductions for expenses and taxes from its overall revenue.

Total Dividend Payment

The sum of all dividends a company pays out to its shareholders over a specific period.