Suppose Supply Is Fixed at 35 Units

question 66

Multiple Choice

Suppose supply is fixed at 35 units.

-Refer to Figure 3.14 to answer this question.If this market is originally in equilibrium and demand increases by 20,what will be the new equilibrium price and quantity?

• A)$3 and 45 units.
• B)$5 and 35 units.
• C)$5 and 45 units.
• D)$7 and 35 units.

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Definitions:

Diversify

Diversify refers to the strategy of spreading investments across various financial instruments, industries, and other categories to reduce exposure to risk.

Efficient Frontier

In portfolio theory, it represents the set of optimal portfolios that offer the highest expected return for a given level of risk or the lowest risk for a given level of expected return.

Risky Assets

Investments with a high degree of uncertainty in their returns, usually implying a greater potential reward.

Investment Opportunity Set

The array of all possible investment combinations available to an investor considering both risk and return.