Consumer Surplus Is the

question 196

Multiple Choice

Consumer surplus is the

• A) the difference between the maximum price consumers are willing and able to pay and the minimum price producers are willing to accept.
• B) the difference between the maximum price consumers are willing and able to pay and the price actually paid to producers.
• C) the difference between the amount a producer is willing to accept and the price actually received.
• D) the area under the marginal benefit curve.
• E) the total amount consumers paid for a product.

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Definitions:

Common Stock Dividends Distributable

A portion of earnings allocated by a company to be distributed to holders of its common stock, recognized as a liability until paid out.

Paid-in Capital

Equity capital that is contributed to a corporation by its shareholders, in addition to the prescribed par value, representing funds received from investors.

Cumulative Preferred Stock

A type of preferred stock that entitles the shareholder to receive dividends that, if omitted, accumulate and must be paid before dividends can be paid to common shareholders.

Annual Dividend

The total amount of dividend payments made to shareholders in a year.