If Both Demand and Supply Increases in a Market That

question 101

Multiple Choice

If both demand and supply increases in a market that is initially in equilibrium,price will:

• A)remain unchanged while quantity will decrease.
• B)remain unchanged while quantity will increase.
• C)increase only if supply increases more than demand.
• D)increase only if demand increases more than supply.
• E)decrease only if supply increases less than demand.

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Definitions:

Capital Budgeting

The process of planning and evaluating investments in assets and projects with long-term implications for a company's financial health.

Offered Rate

The rate of interest that a lender is willing to offer to a borrower for a specific loan, often influenced by market conditions.

Cost of Capital

The rate of return that a company must pay after accounting for the cost of all sources of financing: debt, equity, and any other financing sources.

Debt Costs

The total expenses associated with borrowing money, including interest payments and fees.