An Important Assumption That Is Made When Constructing a Supply

question 532

Multiple Choice

An important assumption that is made when constructing a supply schedule is

• A) only price and quantity matter in determining supply.
• B) firms always want to sell a certain amount of a product.
• C) supply is too important to be left to the marketplace.
• D) all other determinants of supply are held constant.
• E) demand has a positive slope.

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Definitions:

Stated Value Stock

Stated value stock is an issue of shares that does not have a par value but instead has a nominal stated value assigned by the company.

Preferred Stock

A type of equity security that offers dividends and other advantages before common stock, in the event of liquidation.

Common Shareholders

Individuals or entities that own shares of common stock in a corporation, granting them voting rights and a claim on profits.

Organization Expenses

Costs incurred in the creation of a corporation or partnership, such as legal fees and state filing fees, often amortized over time.