Triston Is One of a Number of Shareholders of TVG

question 28

Multiple Choice

Triston is one of a number of shareholders of TVG Group Inc.who lost a substantial sum by relying on the negligently prepared audit of the company's previous fiscal year's financial circumstances.Which of the following would strongly support a viable avenue of recourse for these shareholders against the negligent professional?

• A) a class action law suit that includes the company
• B) a derivative action on behalf of the company
• C) a derivative third party claim by the company
• D) a derivative action on behalf of the shareholders

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Definitions:

Average Cost

The total cost of production divided by the number of units produced, indicating the cost per unit.

Consumer Surplus

The bifurcation between what a consumer wishes to pay for a service or good, and what ends up being spent.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual market price of the good.

Deadweight Loss

Deadweight loss refers to the loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable, often due to market distortion such as taxes or subsidies.