If the Demand Curve for Desktop Computers Shifts Rightward and at the Same

question 26

Multiple Choice

If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward, then

• A)the equilibrium price definitely falls.
• B)the equilibrium price definitely remains the same.
• C)the equilibrium price definitely rises.
• D)More information is needed to determine the effect on the equilibrium price.
• E)the equilibrium quantity definitely increases.

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Definitions:

Return on Common Stockholders' Equity

A financial ratio that measures the amount of net income returned as a percentage of shareholders' equity, demonstrating the profitability of a company from the perspectives of its equity investors.

Price-Earnings Ratio

The price-earnings ratio (P/E ratio) is a measure used in financial analysis to assess a company's valuation by dividing its current share price by its earnings per share.

Leverage

Using debt to increase the return on an investment.

Debt Financing

Raising funds for business activities by borrowing money, typically through loans or by issuing bonds.