If Demand for a Product Falls at the Same Time

question 64

Multiple Choice

If demand for a product falls at the same time supply rises,which of the following might we expect?

• A)Equilibrium price and quantity sold would fall.
• B)Equilibrium price would fall,and equilibrium quantity could either rise or fall.
• C)Both the equilibrium price and the equilibrium quantity could rise or fall.
• D)Equilibrium price would rise,and the equilibrium quantity could rise or fall.

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Definitions:

Price-Earnings Ratio

is a measure of a company's current share price relative to its per-share earnings, used to evaluate if a stock is undervalued or overvalued.

Times Interest Earned

A financial ratio that measures a company's ability to meet its interest payments on outstanding debt, calculated by dividing earnings before interest and taxes (EBIT) by the interest expense.

Debt-To-Equity Ratio

A gauge for understanding the proportionate use of debt and equity by shareholders in the funding mechanisms for a company's assets.

Equity Multiplier

A metric indicating the proportion of a firm's assets funded by owner's equity.