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In Each of the Following Situations, List What Will Happen

question 239

Essay

In each of the following situations, list what will happen to the equilibrium price and the equilibrium quantity for a particular product, which is a normal good.
a.The population increases and the price of inputs increase.
b.The price of a complement increases and technology advances.
c.The number of firms in the market increases and income increases.
d.Price is expected to increase in the future.
e.Consumer preference increases and the price of a substitute in production decreases.


Definitions:

Market Value

The ongoing trading value of an asset or service in the market.

Preferred Stock

A type of stock that provides holders with a fixed dividend prior to any dividend payments to common stockholders, and typically does not carry voting rights.

Common Stock

A form of corporate equity ownership, representing a share in the ownership of a company and a claim on a portion of its profits.

Cost of Preferred Stock

The dividend required to be paid by a company for its preferred shares, expressed as a percentage of the current market price.

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