The Effect of Higher Gasoline Prices Is Most Likely To

question 83

Multiple Choice

The effect of higher gasoline prices is most likely to:

• A) increase the demand for hybrid cars and increase the demand for gas guzzlers.
• B) decrease the demand for hybrid cars and decrease the demand for gas guzzlers.
• C) increase the demand for hybrid cars and decrease the demand for gas guzzlers.
• D) decrease the demand for hybrid cars and increase the demand for gas guzzlers.

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Definitions:

Price Per Share

The amount of money that each individual share of a company's stock is sold for.

Incremental Value

Incremental value refers to the additional value created or generated by making a particular decision or undertaking a project, compared to the scenario where the decision is not made or the project not undertaken.

Equity-Financed

Refers to the method of raising capital for a business through the sale of equity or shares, as opposed to debt financing.

Merger Premium

The additional cost paid by a company over the market value of the target company during an acquisition.