If,at the Current Price,there Is a Shortage of a Good,then

question 155

Multiple Choice

If,at the current price,there is a shortage of a good,then

• A)sellers are producing more than buyers wish to buy.
• B)the market must be in equilibrium.
• C)the price is below the equilibrium price.
• D)quantity demanded equals quantity supplied.

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Definitions:

Target Company

A firm that another company seeks to acquire.

Cost of Equity

The return that shareholders require for investing in a company's equity, representing the compensation the market demands in exchange for owning the asset and bearing the risk of ownership.

Acquiring Firm

A company that gains control over another company by purchasing its shares or assets.

Real Options

Occur when managers can influence the size and risk of a project’s cash flows by taking different actions during the project’s life. They are referred to as real options because they deal with real as opposed to financial assets. They are also called managerial options because they give opportunities to managers to respond to changing market conditions. Sometimes they are called strategic options because they often deal with strategic issues. Finally, they are also called embedded options because they are a part of another project.