A Market Surplus Occurs If The

question 127

Multiple Choice

A market surplus occurs if the:

• A) price is below the equilibrium price.
• B) price is equal to the equilibrium price.
• C) equilibrium price is above the actual price.
• D) equilibrium price is below the actual price.

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Definitions:

Paid-In Capital

The total amount of money shareholders have invested in the company through the purchase of its stock.

Par

The face value of a bond or other financial instrument, often used in reference to its original issue value.

Stated Value

A value that is assigned to a share of stock by the company's board of directors, not based on market value, but used for accounting and reporting purposes.

Excess of Par

The amount by which a security's sale or issue price exceeds its par value.