When Both Supply and Demand Shift to the Right

question 3

Multiple Choice

When both supply and demand shift to the right:

• A) equilibrium price always rises.
• B) equilibrium price always falls.
• C) equilibrium quantity always falls.
• D) equilibrium quantity always rises.
• E) equilibrium quantity is indeterminate.

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Definitions:

Net Income

Net Income is the total earnings of a company after subtracting all expenses, taxes, and costs from its total revenue.

Dividend

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

Treasury Stock

Shares of a company's own stock that it has repurchased from shareholders and can hold, reissue, or retire.

Common Stock

Represents ownership shares in a corporation, giving shareholders voting rights and a residue claim on corporate earnings in the form of dividends.