In a Competitive Market, a Price Ceiling Set Below the Free-

question 31

Multiple Choice

In a competitive market, a price ceiling set below the free- market equilibrium price will result in

• A) a new free- market equilibrium at a lower price and higher output level.
• B) the quantity demanded exceeding quantity supplied and thus a shortage in the market.
• C) the quantity supplied exceeding quantity demanded and thus a surplus in the market.
• D) excess supply.
• E) a continuation of the free- market equilibrium price and quantity.

Realize the importance of a business plan's elements in securing financing.

Acknowledge the advantages and disadvantages of home-based businesses.

Grasp the criteria for small-business designation and related benefits.

Recognize the support role of the Small Business Administration (SBA) and Small Business Investment Companies (SBICs) in assisting small businesses.

---

Definitions:

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the market capitalization remains the same.

Par Value

The face value of a bond or stock as stated by the issuing company, which may or may not reflect the security's market value.

Stock Split

A corporate action to increase the number of outstanding shares while reducing the price per share, keeping the overall market capitalization the same.

Par Value

The face value of a bond or stock as specified by its issuer, which does not necessarily correspond to its market value.