Based on the Table Below, What Is the Total Amount

question 78

Multiple Choice

Based on the table below, what is the total amount of consumer surplus assuming this market reaches equilibrium? $\begin{array}{lcc}\underline{\text { Price } }&\underline{ \text { Quantity Demanded }} & \underline{\text { Quantity Supplied }} \\\$ 1.00 & 7 & 1 \\\$ 2.00 & 6 & 2 \\\$ 3.00 & 5 & 3 \\\$ 4.00 & 4 & 4 \\\$ 5.00 & 3 & 5 \\\$6.00 & 2 & 6 \\\$ 7.00 & 1 & 7\end{array}$

• A)$1.00
• B)$2.00
• C)$3.00
• D)$7.00
• E)$10.00

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Definitions:

Equity

The value of an asset after deducting the amount of all liabilities on that asset. In investing, it often refers to the ownership interest held by shareholders in a corporation.

Firm's Debt

The total amount of money a company owes to creditors, including loans, bonds, and other forms of debt.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk of financial loss.

Call Option

An agreement that grants the purchaser the option, not the compulsion, to acquire an asset at a predetermined price during a defined timeframe.