Which of the Following Correctly Describes the Market-Clearing Price

question 75

Multiple Choice

Which of the following correctly describes the market-clearing price?

• A)It is the price which minimizes the aggregate surplus in the market.
• B)It is the same as the equilibrium price.
• C)It is the price at which the maximum quantity of the good is sold.
• D)It is the minimum price at which the product must be sold for the firm to remain in business.
• E)It is the price at which firms have to exit the market.

---

Definitions:

Compensation

Payment awarded to someone in exchange for loss, suffering, or for performed services.

Dissolution

The change in the relation of partners caused by any partner’s ceasing to be associated with the carrying on of the partnership’s business.

Board of Directors

A group of individuals elected to represent shareholders and direct the affairs of a corporation, setting its strategic direction.

Dissenting Shareholders

Shareholders who do not agree with certain corporate actions, such as mergers and acquisitions, and who may have specific rights to demand the corporation buy back their shares at a fair value.