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2 years ago

Suppose there is a simultaneous increase in demand and decrease in supply, what effect will this have on the equilibrium price?

1 answer:

5 0

Although the impact on the equilibrium quantity cannot be determined, a rise in demand and a decrease in supply will result in an increase in the equilibrium price. 1. Consumers now place a higher value on goods, and producers must charge a higher price to offer the goods; as a result, prices will rise for all quantities.

If demand increases at the same time as supply increases, as is the case in the scenario depicted, the new equilibrium price will be greater than the initial equilibrium price.

We therefore know that an increase in supply decreases equilibrium price and increases quantity, while a rise in supply increases equilibrium price and decreases quantity (and vice versa) (and vice versa).

To learn more on equilibrium price

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3 years ago

You purchased 1,000 shares of the New Fund at a price of $20 per share at the beginning of the year. You paid a front-end load o

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Answer:

6.37%

Explanation:

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= (Aggregate investment value after one year - Investment value) / investment value ----- equation 1

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3 years ago

A struggling company currently has a total value of $700,000. It owes $500,000 from debt financing (assume these are loans from

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Answer:

What is the current value of the firm to the owners?

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Show that this in expectation decreases the firm’s value, and explain why, in spite of that, the owners of the company would want to undertake the project.

the expected value of the company after the new project = (50% x 0) + (50% x $1,200,000) = $600,000, so the net value of the company actually decreases by $100,000.

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