Answer:
B and D, $170
Explanation:
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Answer:
$9.40
Explanation:
First we have to calculate the future value of the stock when it starts to pay the $1.40 using the perpetuity formula:
stock price in 7 years = $1.40 / 10.7% = $13.08
Now we have to find the present value of both next year's dividend and the perpetuity:
stock price = ($3.30 / 1.107) + ($13.08 / 1.107⁷) = $2.98 + $6.42 = $9.40
Answer:
The options for this question are the following:
A. Quantity demanded will decrease, quantity supplied will increase, and a shortage will result.; B. Quantity demanded will increase, quantity supplied will decrease, and a surplus will result.; C. Quantity demanded will decrease, quantity supplied will increase, and a surplus will result; D. Quantity demanded will increase, quantity supplied will decrease, and a shortage will result.
The correct answer is C. Quantity demanded will decrease, quantity supplied will increase, and a surplus will result.
Explanation:
There is a strong correlation between pricing (at prices higher than the equilibrium price) and the creation of excess supply. Following the analysis of supply and demand, if we start from an initial equilibrium situation (where the quantity demanded and supplied are equal) and the authority decides to set a much higher price, the quantity demanded of the product will decrease and, on the other hand, the quantity supplied will increase, so producers will want to sell more than consumers want to buy. The previous problem will be solved if the authority decides to lower the price of the product, since this encourages consumers to buy more and bidders to produce less.
An economist would conclude that when goods are not rationed by monetary price or lottery, other rationing mechanisms like waiting arises.
Here, many people were willing to wait for more than two hours to see the rare flower. The visiting was arranged in such a way that first come, first see. The rareness of the flower made no option but to wait in line to see it.
In an economist's perspective, he will compare the flower to the goods. There is rationing for food through monetary and lottery mechanisms. But if there were no mechanisms like this, then waiting will be the only way to consume goods. Here, because the flower was rare, it cannot be rationed by price. But we are still able to ration goods by price. If someday, there will be lack of goods, then the only rationing mechanism we could opt will be waiting in lines.
Learn more about rationing mechanisms at brainly.com/question/14938189
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