As a Result of an Increase in the Supply of a Good

question 117

Multiple Choice

As a result of an increase in the supply of a good, the equilibrium quantity ________ and the equilibrium price ________.

• A) increases; falls
• B) increases; rises
• C) decreases; falls
• D) decreases; rises

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Definitions:

Required Return

The lowest profit an investor anticipates making from an investment in a specific asset, considering its associated risk.

Required Rate of Return

A rephrased definition; the minimum percentage of return investors demand from an investment to compensate for its risk.

Constant Rate

A constant rate implies a steady, unchanging rate of growth or return over a specified period of time.

Year-End Dividend

A dividend payment made by a company to its shareholders at the end of its fiscal year.