The Following Graph Represents the Market for a Certain Good

question 102

Multiple Choice

The following graph represents the market for a certain good.

-Refer to the graph above.Which of the following is true?

• A) Social surplus could be increased if the producer could manage to sell more than five units at the price of 5.
• B) Selling a sixth unit at a price of 5 increases social surplus by 1.
• C) As long as the price of the good is 5, social surplus is maximized independently of the quantity sold.
• D) As long as the quantity sold is 5, social surplus is maximized independently of the price of the good.

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Definitions:

Annual Dividend

The total amount of dividends a company pays out to its shareholders in one fiscal year.

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument as stated by the issuer.

Preferred Stock

A type of ownership in a corporation that has a higher claim on its assets and earnings than common stock, typically with dividends that must be paid out before dividends to common stockholders.

Rate Of Return

A measure of the profit or loss of an investment over a specified period, expressed as a percentage of the investment's initial cost.