When Toyota Introduced Its 2010 Prius,it Announced That the Average

question 144

Multiple Choice

When Toyota introduced its 2010 Prius,it announced that the average retail price of the 2010 model would be lower than the average retail price was for the equivalent 2009 model.Which of the following would explain the price differential?

• A)The demand for the Prius had increased,and the supply of the Prius remained unchanged.
• B)The supply of the Prius had decreased,and the demand for the Prius remained unchanged.
• C)The demand for the Prius had decreased,and the supply of the Prius had increased.
• D)The demand for the Prius had increased,and the supply of the Prius had decreased.

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Definitions:

Times-Interest-Earned Ratio

A financial ratio that measures a company's ability to meet its interest payments on outstanding debt.

Debt-to-Equity Ratio

A ratio demonstrating the mix of owner's equity and liabilities in financing the assets of a company.

Quick Ratio

A liquidity measure that evaluates a company's ability to pay off its current liabilities with its most liquid assets, excluding inventories.

Indexed Bonds

Bonds that have their principal amount or interest payments linked to an index, such as inflation or a specific price index, to protect investors from inflation risk.