Suppose a New Law Requires All Piercing Studios to Pass

question 259

Multiple Choice

Suppose a new law requires all piercing studios to pass tougher licensing tests and to begin using more costly sterilization methods. Other things constant, this law would cause

• A) an increase in the supply of piercings and a lower price for piercings.
• B) an increase in the supply of piercings and a higher price for piercings.
• C) a decrease in the supply of piercings and a higher price for piercings.
• D) a decrease in the supply of piercings and a lower price for piercings.

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Definitions:

Non-Interest-Bearing Note

A promissory note or loan agreement that does not accrue interest over its duration.

Present Value

The contemporary valuation of a sum of money to be received in the future or ongoing cash flows, using a specific return rate.

Sales Revenue

The total amount of money received by a company from its sales of goods or services, before any expenses are subtracted.

Premium On Bonds Payable

The amount by which the selling price of a bond exceeds its face value, representing an additional cost to the issuer over the bond’s life.