If the Demand for an Asset Increases, Its Price Will

question 117

Multiple Choice

If the demand for an asset increases, its price will

• A) increase and the rate of return for new investors of this asset will increase.
• B) decrease and the rate of return for new investors of this asset will increase.
• C) decrease and the rate of return for new investors of this asset will decrease.
• D) increase and the rate of return for new investors of this asset will decrease.

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Definitions:

Price

The total financial stipend expected, mandated, or handed over in payment for something.

Profit

The financial gain achieved when the revenue earned from selling goods or services exceeds the costs associated with their production and distribution.

Production Function

An equation or formula that specifies the output a firm can produce with varying combinations of inputs or factors of production.

Proportions

The relative relationship in size, quantity, or degree between two or more things.