Figure 7-11 -Refer to Figure 7-11.If the Supply Curve Is S and Is

question 55

Multiple Choice

Figure 7-11
-Refer to Figure 7-11.If the supply curve is S and the demand curve shifts from D to D',what is the change in producer surplus?

• A)Producer surplus increases by $3,125.
• B)Producer surplus increases by $5,625.
• C)Producer surplus decreases by $3,125.
• D)Producer surplus decreases by $5,625.

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Definitions:

Dividend Paid

Dividend Paid refers to the amount of earnings distributed by a corporation to its shareholders as a reward for their investment.

Preferred Stock

A type of stock issued by corporations, which gives holders a right to share in earnings and liquidation before common shareholders do.

Capital Stock

The general term applied to the shares of a corporation.

Preferred Stock

A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock.