If Both Supply and Demand Decrease by the Same Amount,the

question 277

Multiple Choice

If both supply and demand decrease by the same amount,the equilibrium price

• A) does not change.
• B) rises.
• C) falls.
• D) cannot be predicted.
• E) None of the answers is correct because the price depends on what happens to the equilibrium quantity.

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Definitions:

Company Cost

The total expenditure incurred by a company in the process of producing or selling goods and services.

Risk-Adjusted Rate

A financial metric that adjusts returns on investments by taking into account the level of risk involved, aiming to provide a more accurate comparison across different investments.

Risk-Free Asset

An investment that provides a guaranteed return with no risk of financial loss.

Stock Market

A marketplace where buyers and sellers trade shares of publicly held companies, reflecting the economic health and investor sentiment toward those companies.