If the Market Supply Increases And, Simultaneously, Market Demand Decreases

question 140

Multiple Choice

If the market supply increases and, simultaneously, market demand decreases, the new equilibrium will show:

• A) market price will decrease, and market quantity exchanged could increase, decrease, or remain unchanged.
• B) market price will increase, and market quantity exchanged will decrease.
• C) market price will increase, and the quantity exchanged could increase, decrease, or remain the same.
• D) market price could increase, decrease, or remain the same, and quantity exchanged will increase.
• E) market price will increase, decrease, or remain the same, and quantity exchanged will decrease.

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Definitions:

Net Income

The profit of a business after all expenses, taxes, and costs have been subtracted from total revenue.

Income Statement

A document detailing a business's income, expenditures, and earnings during a designated timeframe.

Solvency

The ability of a company or individual to meet its long-term financial obligations and continue operating in the long term.

Price-Earnings Ratio

A valuation metric for companies, calculated by dividing a company's share price by its earnings per share.