When the Supply of a Good Decreases and the Demand

question 54

Multiple Choice

When the supply of a good decreases and the demand for the good remains unchanged,consumer surplus

• A)decreases.
• B)is unchanged.
• C)increases.
• D)may increase,decrease,or remain unchanged.

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Definitions:

Stock Dividend

A payment made to shareholders in the form of additional shares rather than cash, often based on a predetermined ratio to existing ownership.

Balance Sheet

A summary document that outlines a firm's liabilities, assets, and equity held by shareholders at a particular moment.

Irrelevance Theory

A concept in corporate finance that posits that the financing methods used by a company, whether through debt or equity, have no effect on its value.

Capital Gains

The profit earned from the sale of an asset, where the sale price exceeds the purchase price.