Use the Following to Answer Questions

question 278

Multiple Choice

Use the following to answer questions:
-(Table: Demand Schedule for Gadgets) Look at the table Demand Schedule for Gadgets. The market for gadgets consists of two producers, Margaret and Ray. Each firm can produce gadgets at a marginal cost of $2 and no fixed cost. If industry output is 300 gadgets produced by Margaret and 200 gadgets produced by Ray and if Ray decides to increase output by 100, industry price will be:

• A) $4.
• B) $3.
• C) $2.
• D) $1.

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Definitions:

Issuing Securities

This refers to the process by which corporations, governments, or other entities offer new stocks, bonds, or other financial instruments to the public to raise capital.

Regular Underwriting

The purchase of securities from the issuing company by an investment banker for resale to the public.

Preliminary Prospectus

An initial document provided by a securities issuer that details an investment offering for sale to the public.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a government or corporation (bond), or rights to ownership as represented by an option.