The Following Two Graphs Depict the Equilibrium Price of a Pound

question 55

Multiple Choice

The following two graphs depict the equilibrium price of a pound of grapes in California and West Virginia, respectively. Assume the type and quality of the grapes being sold in the two states are identical. Further, assume grape sellers incur zero costs to transport grapes between the two states and there are no other barriers to trade. Use these graphs to answer the next three questions:


-According to the law of one price,the supply curve in the California grape market will ______________,and the supply curve in the West Virginia grape market will _____________.

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Definitions:

Returns to Shareholders

The gains earned by shareholders on their investments in a corporation, typically in the form of dividends and stock price appreciation.

WACC

Stands for Weighted Average Cost of Capital; it represents the average rate of return a company is expected to pay its security holders to finance its assets.

Business Risks

The exposure a company or organization faces from factors that may affect its ability to achieve its objectives or financial goals.

Financial Risks

The risk of experiencing financial loss from an investment or entrepreneurial activity.