When the Quantity Demanded of a Good Exceeds the Quantity

question 34

Multiple Choice

When the quantity demanded of a good exceeds the quantity supplied of the good at the prevailing market price, _____

• A) the market will be in equilibrium.
• B) the price of the good will decrease.
• C) the price of the good will tend to increase.
• D) the demand curve will shift rightward until the surplus is eliminated.

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Definitions:

Repurchase

The act of buying back previously sold stock or bonds from the market or shareholders by the issuing company, often to reduce the amount of outstanding shares and increase the value of remaining shares.

Book Value

Book value is the net value of a company's assets found on its balance sheet, calculated as the total assets minus intangible assets and liabilities.

Par Value

The nominal face value of a security as stated by the issuer, often used in reference to bonds or shares.