Ceteris perribus, the price of a stock will definitely increase when the A

Economics May 21, 2021

Ceteris perribus, the price of a stock will definitely increase when the A. Supply of the stock increases. B. Prevailing interest rate increases. C. Demand for the stock increases. D. Demand for the stock and supply of the stock both decrease.

Expert Solution

Answer

C .

Explanation

Ceteris paribus is a Latin phrase. It means "Other things remain unchanged". It mostly used in Finance and Economics. According to basic Demand - Supply rule, when demand increases and supply remains the same, the higher demand leads to a higher equilibrium price and vice versa. So, If the demand of a stock increases, the price will increase.

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