Assume a Market Is in Equilibrium

question 39

Multiple Choice

Assume a market is in equilibrium.There is an increase in supply, but no change in demand As a result the equilibrium price is ________, and the equilibrium quantity is ________.

• A) rises; increases
• B) rises; decreases
• C) rises; does not change
• D) falls; decreases
• E) falls; increases

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Definitions:

Equity Method

An accounting technique used to record an investor’s proportional share of an associate company’s profits or losses on its financial statements.

Fair Value Enterprise Method

An approach to valuing a business by estimating the present value of foreseeable future earnings and the net asset value.

Equity Method

An accounting technique used to record investments in which the investor has significant influence over the investee but does not have full control.

Dividends

A portion of a company's earnings distributed to its shareholders, typically in the form of cash payments or additional shares.