A Market Comprised of a Downward-Sloping Demand Curve That Intersects

question 49

Multiple Choice

A market comprised of a downward-sloping demand curve that intersects an upward-sloping supply curve is said to be stable because:

• A)price will never change.
• B)quantity will never change.
• C)demand will never change.
• D)at any price other than equilibrium, forces in the market move price towards the equilibrium.

---

Definitions:

Discount Rate

The interest rate used to determine the present value of future cash flows, guiding investment and financing decisions by reflecting the opportunity cost of capital.

NPV

An abbreviation for Net Present Value, it assesses the worth of future cash flows in today's dollars, subtracting the initial investment.

PI

A mathematical constant representing the ratio of a circle's circumference to its diameter, approximately 3.14159.

Payback Method

A capital budgeting technique that calculates the time required to recoup the cost of an investment.