When the Price of a Good Is Below Its Equilibrium

question 30

Multiple Choice

When the price of a good is below its equilibrium value:

• A)consumers will bid the price up.
• B)excess supply will occur.
• C)it will tend to stay below the equilibrium value.
• D)suppliers will notice their inventories are growing.

Identify the effects of reverse stock splits on the number of shares outstanding.

Predict the new stock price after a stock split based on the previous price and expected market value increase.

Describe an optimal distribution policy for a firm in terms of maximizing stock price.

Compare the effects of stock dividends and stock splits on shareholder's wealth.

---

Definitions:

Employees Contribute

The involvement or effort of workers in their job roles, tasks, or towards organizational goals.

Flexible Benefits Plans

Flexible Benefits Plans are employee benefit programs that allow workers to choose from a range of benefit options tailored to their personal needs and preferences.

"Cafeteria" Plans

Flexible benefit plans that allow employees to choose from a menu of options to create a benefits package tailored to their needs.

Health Care Benefits

Insurance coverage or services provided to employees, offering financial protection for medical expenses.