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3 years ago

If supply and demand both increase then equilibrium price will also increase. True or False

Business

1 answer:

lukranit [14]3 years ago

6 0

Answer:

This statement is false.

Explanation:

The change in the equilibrium price due to a change in in an increase in both demand and supply cannot be predicted without knowing the magnitude of the increase.

If the proportionate increase in the demand is greater than the increase in supply, the equilibrium price will increase.

If the proportionate increase in the supply is greater than the increase in demand, the equilibrium price will decrease.

If the increase in demand is proportionately equal to the increase in supply, the equilibrium price will remain the same.

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We also discussed that the spread (difference) between two futures prices for a storable commodity should be given by the cost o

otez555 [7]

Answer:

Market Principal notes that there should be no arbitration in the efficient market unless there is some arbitration so an efficient market system can quickly neutralize the situation.

The futures market for May, in the example above, is trading at $3.82 while the spot price is $3.45. The spot price month is listed but carriage costs and transportation are given as $0.20 and $0.03 per month.

This gives us a total price of $3.68 and this means the futures market is priced at a premium of $0.14.

3.82-= 0.14 (3.45 + 0.20 + 0.03)

This is not normal, of course, and traders will start shortening futures prices when going on the spot contracts for long. This would drive down the price of the futures while increasing the spot price, which should stabilize at $3.75.

Nevertheless, it is necessary to remember that in such equation there is also a borrowing fee which must also be taken into account. If the interest rate is 6 percent a year so it also takes into account a monthly finance fee of 0.5 percent of the contract value.

4 0

4 years ago

An income tax rate increase will most likely ____ aggregate demand and _____ aggregate supply.

egoroff_w [7]

<u>Answer:</u> decrease; decrease

<u>Explanation:</u>

Aggregate demand means the total quantity that would be purchased irrespective of the price levels. Aggregate supply means the total quantity of the goods or services which the firms will sell at a price that is given in the economy. So when the income tax rate increases the aggregate demand and aggregate supply of the products will both decrease.

The increase and decrease in the tax rates brings a shift in the aggregate demand and aggregate supply curve. Other factors which influence these curves are interest rates, income , exchange rates and inflation rates.

7 0

4 years ago

Gross primary productivity is higher than net primary productivity. The difference between the two is

elena55 [62]

dotnt ask me about high school stuff

3 0

3 years ago

You have just won the lottery and will receive $1,000,000 in one year. You will receive payments for 35 years and the payments w

aleksandr82 [10.1K]

Answer:

Present Value= $9,003,586.40

Explanation:

Giving the following information:

You have just won the lottery and will receive $1,000,000 in one year. You will receive payments for 35 years and the payments will increase by 3.4 percent per year. The appropriate discount rate is 7.4 percent.

I will assume that 1 million is the first payment of 35.

First, we will calculate the final value. To do this, we need to sum the growing rate to the interest rate.

FV= {A*[(1+i)^n-1]}/i

A= annual deposit= 1,000,000

i= 0.074 + 0.034= 0.108

n=35

FV= {1,000,000*[(1.108^35)-1]}/0.108= $326,067,227.1

Now, we can calculate the present value:

PV= FV/ (1+i)^n

PV= 326,067,227.1/ 1.108^35= $9,003,586.40

7 0

3 years ago

Synergies arise when one or more of a diversified company's business units are able to lower costs because they can more effecti

vladimir1956 [14]

Answer:

Economies of scope

Explanation:

Economies of scope -

The meaning of the term economies of scope is the reduction in the cost of a particular product due to the production of some similar product .

It refers to the situation where the marginal cost of the company or organization reduces , because of some production of the complimentary services or goods , is referred to as economics of scope .

Hence , from the given scenario of the question ,

The correct answer is Economies of scope .

8 0

3 years ago