Consider a Market That Is in Equilibrium

question 110

Multiple Choice

Consider a market that is in equilibrium.If it experiences both a decrease in demand and an increase in supply,what can be said of the new equilibrium? The equilibrium:

• A) price and quantity will both rise.
• B) quantity will definitely fall, while the equilibrium price cannot be predicted.
• C) price will definitely fall, while the equilibrium quantity cannot be predicted.
• D) price and quantity will both fall.

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Definitions:

Return On Equity

A measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.

Bond Indenture

A legal contract between a bond issuer and bondholders stating the terms of a bond, including interest rates, maturity date, and other conditions.

Issuing Corporation

A company that offers its shares to the public through the issuance of equity securities in a market.

Convertible Bonds

Bonds that can be converted into a predetermined number of the issuing company's shares, typically at the discretion of the bondholder.