When a firm performs well, investors holding its shares are ________ willing to sell them and therefore, the demand for the stock ________.
A) more; increases
B) less; decreases
C) less; increases
D) more; decreases

Question

Quizplus · Accepted Answer

When a firm performs well, investors are less willing to sell their shares because they expect the value to continue increasing. This decreased willingness to sell, combined with an increased interest from other investors wanting to buy into the successful firm, leads to an increase in demand for the stock.

When a Firm Performs Well, Investors Holding Its Shares Are