Suppose That the Demand Curve for a Good Is Given

question 38

Multiple Choice

Suppose that the demand curve for a good is given by Q_D = 60 - 0.5P_D,while the supply curve for the good is given by Q_S = 20 + 0.5P_S.The equilibrium quantity is ______ and the equilibrium price is _____.

• A) 20;60
• B) 60;20
• C) 60;60
• D) 40;40
• E) 45;30

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Definitions:

Market Price

The marketplace value at this time for an asset or service.

Underwriting Fee

A fee charged by underwriters for assessing, guaranteeing, and distributing a new issue of securities to the public.

Common Stock

A type of ownership in a corporation that grants holders voting rights and a share in the company’s profits via dividends.

Rights Offering

Rights offering is a financial opportunity provided to existing shareholders to purchase additional shares directly from the company at a predetermined price, usually lower than the market price, before the shares are offered to the public.