Suppose there is an increase in demand in a market and no change in the supply. What will happen to the market equilibrium price
and quantity?
a.Equilibrium price will fall; equilibrium quantity will rise.
b.Equilibrium price will rise; equilibrium quantity will fall.
c.Equilibrium price will rise; equilibrium quantity will rise.
d.Equilibrium price will fall; equilibrium quantity will fall.
a.Equilibrium price will fall; equilibrium quantity will rise.
b.Equilibrium price will rise; equilibrium quantity will fall.
c.Equilibrium price will rise; equilibrium quantity will rise.
d.Equilibrium price will fall; equilibrium quantity will fall.
1 answer:
Answer:
c.Equilibrium price will rise; equilibrium quantity will rise.
Explanation:
If there's an increase in demand and supply remains unchanged. The demand curve would shift to the right and there would be an excess of demand over supply. Equilibrium price and quantity would increase.
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Answer:
b. Will always be higher than the dividend paid per share
Explanation:
A firm pays dividend to it's stockholders based upon it's earnings.
Earnings per share (EPS) is expressed as:
=
Dividend payout ratio on the other hand is expressed as:
= EPS (1 - b)
wherein, b = retention ratio which denotes the percentage of earnings retained by a firm i.e not distributed as dividends.
Thus, a firm's earnings per share would always be higher than the dividend paid by it per share.