-Refer to Exhibit 4-4

question 49

Multiple Choice

-Refer to Exhibit 4-4.Which of the following is false?

• A) Graph (1): There would be a shortage of the good if a price floor is set at P₃.
• B) Graph (2): As supply increases,equilibrium quantity remains constant.
• C) Graph (3): As demand increases,equilibrium price remains constant.
• D) Graph (4): As supply changes,equilibrium price stays the same.

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Definitions:

Treasury Stock

Shares of a company's own stock that have been reacquired by the company and held in the company's treasury.

Contra Equity

An equity account that decreases the total equity of a company, often related to withdrawals or deductions from the total equity.

Common Stock Outstanding

The shares of a corporation's stock that are issued and held by investors, excluding treasury shares.

Common Stock Issued

Shares of a company that have been allocated to shareholders, representing ownership interest in the corporation.