Which of the Following Best Represents the Stream of Income

question 33

Multiple Choice

Which of the following best represents the stream of income that is available to stockholders?

• A) Net profit after tax.
• B) Earnings before interest, taxes and dividends
• C) Gross profit
• D) Operating profit

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Definitions:

Allocative Efficiency

A state of the economy where the distribution of resources among different uses is optimal, maximizing total societal welfare.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, establishing market balance.

Equilibrium Quantity

The level of goods or services supplied matches the consumer demand at the price which establishes market equilibrium.

Preset Price

refers to a price that is established in advance and does not change in response to market conditions or negotiation.