Refer to the Information Provided in Figure 5

question 40

Multiple Choice

Refer to the information provided in Figure 5.6 below to answer the question that follows. Figure 5.6
-Refer to Figure 5.6. The market is initially in equilibrium at Point A and supply shifts from S1 to S2. Which of the following statements is true?

• A) Price will still serve as a rationing device causing quantity supplied to exceed 12 thousand pizzas.
• B) There is no need for price to serve as a rationing device in this case because the new equilibrium quantity exceeds the original equilibrium quantity.
• C) Price will still serve as a rationing device causing quantity demanded to fall from 12 to 10 thousand pizzas.
• D) The market cannot move to a new equilibrium until there is also a change in demand.

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Definitions:

Rate of Return

The gain or loss of an investment over a specific period, expressed as a percentage of the investment's initial cost.

Dividend

A portion of a company's earnings distributed to its shareholders, usually in the form of cash or stock.

Expected Growth Rate

The anticipated rate at which a company, asset, or economy is expected to grow in the future.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment’s cost.