Market Stabilization

question 54

Multiple Choice

Market stabilization:

• A) is the action by the managing investment dealer to keep the price of newly issued securities from rising quickly.
• B) usually lasts 3-6 days but can last up to 60 days if a security is difficult to distribute.
• C) can always keep prices of securities from falling.
• D) is accomplished by repurchasing securities as the market price moves below the initial public offering price.

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Definitions:

Marginal Revenue

Marginal Revenue is the additional income generated from selling one more unit of a good or service.

Profit-maximizing Level

The point at which a business achieves the highest profit, where marginal cost equals marginal revenue.

Market Demand

The sum of all the quantities of a good or service demanded per period by all the households buying in the market for that good or service.

Total Revenue

The total income a firm receives from selling its goods or services, calculated as the price per unit times the number of units sold.