The Figure Given Below Shows the Demand Curves [D₁ and D₂]

question 18

Multiple Choice

The figure given below shows the demand curves [D₁ and D₂] and the supply curve [S₁] of capital.Figure 17.1

-What is the main difference between common and preferred stocks?

• A)Common stocks pay interest whereas preferred stocks pay dividends.
• B)Preferred stocks carry voting rights whereas common stocks do not carry voting rights.
• C)Preferred stocks pay a guaranteed dividend, while common stocks may or may not pay dividends.
• D)In case of bankruptcy, preferred stockholders have a right to the company's asset, whereas common stockholders do not have such rights.
• E)Common stocks can be converted into preferred stocks while preferred stocks cannot be converted into common stocks.

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Definitions:

Price Discrimination

A pricing strategy where identical or very similar goods or services are sold at different prices by the same provider in different markets or to different customers, based on differences in price sensitivity.

Monopolist

An individual or entity that is the sole provider of a particular good or service, possessing significant control over market prices and output.

Price Discrimination

A pricing strategy where a seller charges different prices for the same product or service to different customers, based on factors like demand, income level, or purchase volume.

Marginal Revenue

The additional income generated from the sale of one more unit of a product or service.