Suppose the Domestic Supply (Q^S) and Demand (Q^D)for MP3 Players $$\begin{array} { l } Q ^ { S } = - 25 + 10 P \\Q ^ { D } = 875 - 5 P\end{array}$$

question 27

Multiple Choice

Suppose the domestic supply (Q^S) and demand (Q^D) for MP3 players in the United States are given by the following set of equations: $$\begin{array} { l } Q ^ { S } = - 25 + 10 P \\Q ^ { D } = 875 - 5 P\end{array}$$ If the United States can import MP3 players from the rest of the world at a per unit price of $50, how many MP3 players will be produced in the United States?

• A)625
• B)475
• C)925
• D)525

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Definitions:

Cumulative Return

Cumulative return is the aggregate amount of money gained or lost by an investment over a set period, typically expressed as a percentage.

Initial Margin

The portion of the purchase price that an investor must deposit when buying securities on margin; serves as a down payment on the investment.

Maintenance Margin

The minimum amount of equity that must be maintained in a margin account after a purchase has been made, to keep the account open.

Long Futures Position

Holding a futures contract that obligates the buyer to purchase the underlying asset at a specified price on a specified future date, typically anticipating a price rise.