Question

Which of the following statements is FALSE regarding a broker-dealer acting as a market maker in a stock?

A It trades for its own account when buying and selling securities
B It makes money by charging commissions for executing transactions
C When making a market, it is acting as a principal
D It must be prepared to honor the prices it quotes unless it clearly qualifies them

Answer 1

In the goods market, sellers are willing to sell for less than the equilibrium price under certain circumstances, such as excess supply. One such circumstance is when there is excess supply or a surplus of goods. In this situation, sellers may be willing to lower their prices in order to sell their excess inventory.

Step-by-step explanation:

The statement “In the goods market, no seller would be willing to sell for less than the equilibrium price” is false. In the goods market, sellers are willing to sell for less than the equilibrium price under certain circumstances. One such circumstance is when there is excess supply or a surplus of goods. In this situation, sellers may be willing to lower their prices in order to sell their excess inventory. As a result, the price can fall below the equilibrium price.

In the goods market, sellers are willing to sell for less than the equilibrium price under certain circumstances, such as excess supply. One such circumstance is when there is excess supply or a surplus of goods. In this situation, sellers may be willing to lower their prices in order to sell their excess inventory.