If the Government Imposes a Maximum Price That Is Above

question 30

Multiple Choice

If the government imposes a maximum price that is above the equilibrium price,

• A) this maximum price will have no economic impact.
• B) quantity demanded will be less than quantity supplied.
• C) demand will be greater than supply.
• D) the available supply will have to be rationed with a nonprice rationing mechanism.

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Definitions:

Break-even

The point at which total revenues equal total costs, resulting in neither profit nor loss, often used to analyze the viability of a business or project.

Monthly Unit Sales

The total number of units sold by a business in one month.

Advertising Budget

The amount of money allocated for promoting a company's products or services over a specific period.

Net Operating Income

The profit derived from a company's everyday business operations, after subtracting operating expenses from operating revenues.