A Decrease in Price of a Certain Good Most Likely

question 267

Multiple Choice

A decrease in price of a certain good most likely will lead to

• A)an increase in quantity demanded and an increase in the demand for that good.
• B)an increase in quantity demanded but no change in the demand for that good.
• C)an increase in demand but no change in quantity demanded.
• D)no change in demand and no change in quantity demanded.

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Definitions:

Dividends In Arrears

Dividends on preferred stock that have been declared but not yet paid to shareholders.

Cumulative Preferred Stock

A type of preferred stock that accrues dividends if they are not paid in the year they are due, with these dividends being required to be paid out before any dividends can be paid to common stockholders.

Stockholders' Equity

The ownership interest of shareholders in a corporation, represented by share capital plus retained earnings minus treasury shares.

Par Value

A nominal value assigned to share of stock by the corporation's charter, used primarily for legal purposes.