Sir Plus Has a Demand Function for Mead That Is

question 36

Multiple Choice

Sir Plus has a demand function for mead that is given by the equation D(p) = 100 - p. If the price of mead is $90, how much is Sir Plus's net consumer's surplus?

• A) $25
• B) $10
• C) $50
• D) $100
• E) $8,550

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Definitions:

Risk-free Rate

The rate of return on an investment with zero risk, typically based on government bonds.

Dividend Increase

A company's decision to raise the amount of dividends paid to its shareholders, often viewed as a positive signal of the company's profitability and future prospects.

Required Return

Required return is the minimum annual percentage earned by an investment that will induce individuals or companies to put money into a particular security or project.

Dividends

Funds disbursed by a company to its shareholders, typically originating from the firm's earnings.