A Surplus Exists

question 185

Multiple Choice

A surplus exists:

• A) any time the market is out of equilibrium.
• B) at the market clearing price.
• C) when quantity supplied exceeds the quantity demanded.
• D) when quantity supplied is less than quantity demanded.

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Definitions:

Retained Earnings

The portion of a company's profits not distributed as dividends but reinvested in the business.

Dividend Payout Ratio

The fraction of net earnings a firm pays to its shareholders as dividends, expressed as a percentage.

Profit Margin

A financial metric that measures the amount of net income earned with each dollar of sales generated by comparing the net income and the revenue of a company.

Pro Forma

Financial statements prepared using certain assumptions or projections, designed to present a company's expected financial position.