When a Price Ceiling Prevents a Higher Market Price from Rationing

question 80

Multiple Choice

When a price ceiling prevents a higher market price from rationing a good,

• A) a surplus of the good will develop.
• B) scarcity of the good will be eliminated.
• C) non-price factors will play a more important role in the rationing process.
• D) the future supply of the good will expand rapidly.

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Definitions:

Interest Rates

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Analyst

A professional who studies various financial data and information to make investment recommendations or forecast financial trends.

Financial Statements

Formal records that outline the financial activities and position of a business, person, or entity.

Full Disclosure Principle

An accounting principle that requires companies to provide all necessary information in their financial statements that could affect the understanding of those statements.