A Simultaneous Increase in Both the Demand for MP3 Players

question 70

Multiple Choice

A simultaneous increase in both the demand for MP3 players and the supply of MP3 players would imply that

• A)both the value of MP3 players to consumers and the cost of producing MP3 players has increased.
• B)both the value of MP3 players to consumers and the cost of producing MP3 players has decreased.
• C)the value of MP3 players to consumers has decreased,and the cost of producing MP3 players has increased.
• D)the value of MP3 players to consumers has increased,and the cost of producing MP3 players has decreased.

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Definitions:

Firm Commitment

In finance, an underwriter's promise to purchase all the unsold shares of an issue, thereby guaranteeing the amount of capital that the issuer will raise.

Standby Underwriting

A commitment by an underwriter to purchase any unsold shares during an offering, ensuring that the issuing company raises the full amount of capital.

Best Efforts

A contractual clause requiring one party to exert all reasonable attempts to fulfill the terms of the agreement.

Preemptive Rights

The rights that allow existing shareholders to purchase new shares in a company before the company offers them to the public, to maintain their proportionate ownership.