Consider a Market for Coffee That Is Initially in Equilibrium

question 102

Multiple Choice

Consider a market for coffee that is initially in equilibrium.If tea harvest is bad in a particular year,then identify the most likely impact on the equilibrium price and quantity of coffee.

• A)The price of coffee will increase,while the quantity of coffee will decrease.
• B)Both the price and the quantity of coffee will increase.
• C)The price of coffee will decrease while the quantity of coffee will increase.
• D)Both the price and the quantity of coffee will decrease.
• E)There will be no impact on the equilibrium price and quantity of coffee.

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Definitions:

Market Price

The immediate price at which the open market is willing to trade assets or services.

Repurchase Stocks

A company's action to buy back its own shares from the marketplace, which can affect the company's stock price and earnings per share.

IRS

Stands for Internal Revenue Service, the U.S. government agency responsible for tax collection and tax law enforcement.

Stock Repurchases

Stock repurchases, also known as share buybacks, occur when a company buys back its own shares from the marketplace, reducing the amount of outstanding stock.