Given Generally Elastic Demand and Supply Curves for an Industry

question 58

Multiple Choice

Given generally elastic demand and supply curves for an industry, an INCREASE in supply will (all other things being equal) :

• A) lower price but not change quantity demanded.
• B) increase price and increase quantity demanded.
• C) increase price and decrease quantity demanded.
• D) lower price and increase quantity demanded.
• E) not change anything else.

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Definitions:

External Financing

Funds raised from outside the business, e.g., through borrowing or issuing equity.

Debt-equity Ratio

The ratio reflecting on the strategic use of shareholders' equity and debt for the purpose of financing assets.

Growth Rate

The rate at which a company's earnings or revenue increases over a specified period, typically expressed as a percentage.

Retained Earnings

The portion of a company's profit that is held back and not paid out as dividends, often used for reinvestment.