A tech company loses a high-profile patent-infringement case against its top com

Question

A tech company loses a high-profile patent-infringement case against its top competitor. Which of the following is true?

Supply of the company's stock decreases, while the price of a share falls.

Demand for the company's stock decreases, while the price of a share rises.

Demand for the company's stock decreases, while the price of a share falls.

Supply of the company's stock decreases, while the price of a share falls.

Supply of the company's stock decreases, while the price of a share falls.

Demand for the company's stock decreases, while the price of a share rises.

Demand for the company's stock decreases, while the price of a share falls.

Supply of the company's stock decreases, while the price of a share falls.

Explanation / Answer

Shareholders pay huge attention to any detail that is released about a company. A lose of patent - infringement case against a top competitor would spoil the image of the company in the eyes of the investor which will make him sell the stock. Consequently, the demand for this particular company's stock would fall and the because there will be too many sellers of the stock, the price of the share would also fall.

OPTION C

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