Everything Else Remaining Unchanged, an Increase in the Supply of Security

question 9

Multiple Choice

Everything else remaining unchanged, an increase in the supply of security A and a decrease in the demand for security B will cause the price of security A to_____ and the price of security B to_____ .

• A)fall; fall
• B)fall; rise
• C)rise; fall
• D)rise; rise

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Definitions:

Interdependent

A relationship between entities or individuals where each is mutually reliant on the other, making their outcomes closely connected.

Oligopoly

A market structure dominated by a small number of large firms, leading to limited competition and potentially collaborative behavior.

Differentiated Products

Goods or services that are distinguished from similar products by characteristics like quality, design, and branding, which affect consumer choice.

Interdependence

A relationship among firms in which their decisions significantly affect one another’s profits; characteristic of oligopolies.