-Consider the Market Represented by the Schedule in Table 2

question 28

Multiple Choice

-Consider the market represented by the schedule in Table 2.4. At equilibrium,

• A) the market price is $5 per unit.
• B) there is a surplus of 900 units.
• C) there is a shortage of 900 units.
• D) 900 units are traded at a price of $3 per unit.
• E) the market price is $1 per unit and the quantity traded is 500 units.

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation, with voting rights at shareholder meetings.

Cash Dividend

A payment made by a corporation to its shareholders, usually in the form of cash, as a portion of the company's profits.

Earnings Per Share

A financial ratio that calculates the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company’s profitability.

Noncumulative Preferred Stock

A type of preferred stock that does not entitle the holder to claim dividend payments that were missed or not declared by the company.