In Response to the SEC memorandum regarding the adoption of the policy of capping the stock prices of internet-related companies at 90% of their current value, Bryan Economic Analysis, Inc. has come to the following conclusions. Bryan Economic Analysis, Inc. agrees that if something is not done regarding the price of stock of internet-related companies, a drastic drop in the price of these stocks will eventually occur. This drop in the price of these stocks will have an incredibly adverse effect on the state of the US economy and the world stock market in general. The problem of this venture would be that capping of stock prices will result in temporary inefficiencies and a shortage in the market for stocks. However, the capping of stock prices is highly necessary to the future of the US economy. If the prices of these stocks continue to rise without check, the inevitable drop
If the SEC were to put a cap on the price of stock of internet-related companies, several things would occur. First of all, the price would be lowered by 10%, causing an increase in the quantity of stock demanded, because buyers are more willing to buy at the lower price. The demand curve itself would not shift; rather there would be movement along the demand curve.
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