If the Supply of a Product Decreases by More Than

question 215

Multiple Choice

If the supply of a product decreases by more than the demand increases:

• A)the price will rise and the quantity traded will fall.
• B)the price will rise, but the quantity traded could either rise or fall.
• C)the price will fall, but the quantity traded could either rise or fall.
• D)the quantity traded will rise, but the price could either rise or fall.
• E)the quantity traded will fall, but the price could either rise or fall.

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Definitions:

Risk Profile

An evaluation of an individual's or organization's willingness to take risks, as well as their financial ability to manage the impact of those risks.

Incremental

Describing something as increasing or adding on, often in small or gradual steps.

Risk Analysis

The process of identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events.

Financial Option

A contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specified date.