If the Government Were to Intervene and Set the Price

question 100

Multiple Choice

If the government were to intervene and set the price of a dozen eggs above the market price,then we would expect,relative to the market outcome,

• A)an increase in the number of eggs people want to buy and an increase in the number of eggs farmers want to sell.
• B)an increase in the number of eggs people want to buy and a decrease in the number of eggs farmers want to sell.
• C)a decrease in the number of eggs people want to buy and an increase in the number of eggs farmers want to sell.
• D)a decrease in the number of eggs people want to buy and a decrease in the number of eggs farmers want to sell.

---

Definitions:

Budgeted Income Statement

A financial report projecting revenue, expenses, and net income for a future period, based on management's expectations.

Degree of Operating Leverage

A measurement of how a company's operating income responds to a change in sales, indicating the level of fixed versus variable costs.

Total Contribution Margin

The difference between sales revenue and variable costs, representing the total earning potential before fixed costs are deducted.

Variable Costs

Financial outlays that shift proportional to the volume of production or sales, encompassing labor and material costs.