Table 4-8 -Refer to Table 4-8. Suppose Firm X and Firm Y

question 274

Multiple Choice

Table 4-8
-Refer to Table 4-8. Suppose Firm X and Firm Y are the only two sellers in the market. If the market price increases from $12 to $15, quantity supplied will

• A)decrease by 6 units.
• B)decrease by 12 units.
• C)increase by 6 units.
• D)increase by 12 units.

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Definitions:

Treasury Bills

Short-term government securities issued at a discount from face value and mature at par.

Market Risk Premium

The extra return expected by investors for holding a risky market portfolio instead of risk-free assets.

Retained Earnings

Profits that a company chooses to keep for reinvestment in its operations rather than distributing to shareholders as dividends.

Floatation Costs

Expenses incurred by a company during the process of issuing new securities, including legal, accounting, and underwriting fees.