Suppose that the tires of a certain tire manufacturer are discovered to be defective.Other things the same,this news would cause
A)the demand for this company's stock to decrease,so the price would rise.
B)the demand for this company's stock to decrease,so the price would fall.
C)the supply of this company's stock to decrease,so the price would fall.
D)the supply of this company's stock to decrease,so the price would rise.

Question

Quizplus · Accepted Answer

The news of defective tires would cause a decrease in demand for the company's stock, as investors would be less likely to invest in a company facing potential lawsuits and negative publicity. This decrease in demand would lead to a decrease in the price of the stock.

Suppose That the Tires of a Certain Tire Manufacturer Are