When a Surplus Exists in a Market,sellers

question 1

Multiple Choice

When a surplus exists in a market,sellers

• A)raise price,which increases quantity demanded and decreases quantity supplied,until the surplus is eliminated.
• B)raise price,which decreases quantity demanded and increases quantity supplied,until the surplus is eliminated.
• C)lower price,which increases quantity demanded and decreases quantity supplied,until the surplus is eliminated.
• D)lower price,which decreases quantity demanded and increases quantity supplied,until the surplus is eliminated.

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Definitions:

Holding-Period Return

The total return received from holding an asset or portfolio of assets over a specified period of time.

Quarterly Compounded

Interest that is calculated and added to the principal every three months, increasing the amount on which subsequent interest calculations are based.

Quarterly Compounded

Refers to the calculation of interest that is added to the principal balance of an investment or loan four times a year.

Equivalent Effective Rate

A comparable interest rate that equates the interest earned on different investments or loans over the same time period, taking into account the effects of compounding.