According to the Graph Shown, If the Market Goes from Equilibrium

question 98

Multiple Choice

According to the graph shown, if the market goes from equilibrium to having its price set at $4:

• A)deadweight loss will be $90.
• B)consumer surplus will be $160.
• C)deadweight loss will be $60.
• D)consumer surplus will rise by $30.

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Definitions:

Assets and Liabilities

Assets are resources owned by a company expected to provide future benefits, and liabilities are obligations a company owes to outside parties.

Fair Market Value

The price at which an asset would change hands between a willing buyer and a willing seller, not under compulsion and both having reasonable knowledge of the relevant facts.

Acquisition Differential

The excess of the cost of acquisition over the fair value of the net assets acquired in a business combination, often attributed to intangibles like goodwill.

Fair Value Enterprise Method

A valuation method that estimates the value of an entire enterprise as if it were traded in a fair and open market.