Suppose Dan Is Willing to Pay a Maximum of $3,000

question 279

Multiple Choice

Suppose Dan is willing to pay a maximum of $3,000 for a piano,but finds one he can buy for $2,500.Dan's consumer surplus from this piano is

• A) $5,500.
• B) $3,000.
• C) $2,500.
• D) $500.
• E) zero because he buys the piano.

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Definitions:

Held

Usually refers to assets or investments retained over a period, not sold or traded.

Capital Surplus

The amount by which a company's total capital exceeds the par value of its issued share capital.

Paid-in Capital

Funds raised by a company through the sale of common or preferred stock.

Preferred Stock

A type of stock that provides a fixed dividend before any dividends are paid to common stockholders and typically has no voting rights.