An Increase in the Demand for a Product and a Reduction

question 87

Multiple Choice

An increase in the demand for a product and a reduction in its costs of production would:

• A) Decrease the profits of producers
• B) Encourage firms to leave an industry
• C) Encourage firms to enter an industry
• D) Cause a shortage of the product

---

Definitions:

Zero-Coupon Bond

A type of bond that does not pay periodic interest payments and is issued at a discount from its face value.

Purchase Price

The amount of money paid to buy a security, asset, or property.

Face Value

The nominal or dollar value printed on a security or financial instrument, such as a bond or stock.

Zero-Coupon Bond

A bond that does not pay periodic interest payments, but is instead sold at a discount from its face value and pays its full value at maturity.