Which of the Following Events Must Cause Equilibrium Price to Rise

question 116

Multiple Choice

Which of the following events must cause equilibrium price to rise?

• A)demand increases and supply decreases
• B)demand and supply both decrease
• C)demand decreases and supply increases
• D)demand and supply both increase

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Definitions:

Incremental Cash Flows

The additional cash flow a company generates from a particular investment or project, compared to not undertaking the project.

Net Present Value

A method used in capital budgeting to assess the profitability of an investment by calculating the difference between the present value of cash inflows and outflows.

MACRS

MACRS, or Modified Accelerated Cost Recovery System, is a method of depreciation in the United States that allows for faster asset expense recovery over time for tax purposes.

Cash Flows

The movement of money into and out of a business or project, considered crucial for gauging its financial health.