Which of the Following Is an Effect of a Price

question 147

Multiple Choice

Which of the following is an effect of a price ceiling set below the equilibrium price?

• A) Less of the good is produced with the ceiling than would be produced without the ceiling.
• B) The price ceiling has no effect on the market equilibrium.
• C) Consumers can buy more than they can at the equilibrium price because the ceiling price is lower.
• D) None of the above answers is correct.

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold before deducting overheads, payroll, taxation, and interest payments.

Accounts Receivable

Accounts receivable refers to the funds that a company's customers owe it for products or services that have already been provided but for which payment has not yet been received.

Bad Debt Expense

The estimated amount of accounts receivable that will not be collected, recognized as an expense.

Gross Profit

The gap between sales income and the expense of sold products prior to subtracting costs for overhead, employee salaries, taxes, and interest.