Suppose That We Illustrate Demand and Supply with Quantity on the Horizontal

question 77

Multiple Choice

Suppose that we illustrate demand and supply with quantity on the horizontal axis and price on the vertical axis. Which of the following statements is false?

• A)The equilibrium remains unchanged unless an exogenous variable changes.
• B)The equilibrium is represented as the intersection of supply and demand curves.
• C)When a shift in demand or supply occurs, a comparative statics analysis compares the old and the new equilibrium points.
• D)A change in price will cause a shift in the demand curve.

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Definitions:

Cash Consideration

The amount of cash that is paid or received during transactions, such as acquisitions or sales of assets.

Outstanding Shares

The total number of shares of a corporation that have been issued and are held by shareholders, excluding treasury shares.

Contributed Surplus

An account on a company's balance sheet representing the excess amount investors pay over the par value of the company's shares.

Preferred Shares

A class of ownership in a corporation that has a higher claim on assets and earnings than common shares, often with fixed dividends.