Why Did Profitability of Security Firms Drop Precipitously in 2005

question 55

Essay

Why did profitability of security firms drop precipitously in 2005 and rebound in 2006 only to fall again in 2007?

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Definitions:

Surpluses

Occurs when the quantity of a good or service supplied exceeds the quantity demanded at a given price.

Binding Price Floor

A minimum price set by the government above the equilibrium price, leading to a surplus of goods or services in the market.

Supply And Demand

A model that explains how the interaction between product availability and consumers' desire determines the price of goods and services.

Subsidies

Financial support extended by the government to economic sectors, businesses, or individuals, aimed at promoting certain activities or reducing the prices of products.