Figure 4-17 -Refer to Figure 4-17. Which of the Following Price Controls

question 45

Multiple Choice

Figure 4-17
-Refer to Figure 4-17. Which of the following price controls would cause a shortage of 10 units of the good?

• A) a price ceiling of $5.50
• B) a price floor of $5.50
• C) a price ceiling of $6.50
• D) a price floor of $6.50

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Definitions:

Probability Distribution

A probability distribution is a statistical function that describes all the possible values and likelihoods that a random variable can take within a given range.

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project, calculating the net difference between present value of cash inflows and outflows over a period.

IRR

Stands for Internal Rate of Return, a metric used in financial analysis to estimate the profitability of potential investments.

Scenario Analysis

A process of analyzing possible future events by considering alternative possible outcomes (scenarios).