Which One of the Following Transactions Occurs in the Primary

question 69

Multiple Choice

Which one of the following transactions occurs in the primary market?

• A) Purchase of 500 shares of GE stock from a current shareholder
• B) Gift of 100 outstanding shares to a charitable organization
• C) Gift of 200 shares of stock by a mother to her daughter
• D) A purchase of newly issued stock from the issuer
• E) IBM's purchase of GE stock from a dealer

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in a specified period.

Markets

Venues or systems where buyers and sellers engage in the exchange of goods, services, and information.

Constant Marginal Cost

A situation where the cost of producing an additional unit of output does not change with the level of production.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, with higher elasticity indicating a greater responsiveness.