Suppose that the government finds a major defect in one of a company's products and demands that it be taken off the market. Which of the following would we expect?
A)The supply of the stock and the price will both rise.
B)The supply of the stock and the price will both fall.
C)The demand for the stock and the price will both rise.
D)The demand for the stock and the price will both fall.

Question

Quizplus · Accepted Answer

When a product is taken off the market due to a defect, the demand for the company's stock is likely to decrease as investors anticipate potential losses or reduced revenue, leading to a fall in the stock price.

Suppose That the Government Finds a Major Defect in One