Suppose the Equilibrium Price of a Stick of Deodorant Is

question 29

Multiple Choice

Suppose the equilibrium price of a stick of deodorant is $4, and the government imposes a price floor of $5 per stick. As a result of the price floor, the

• A)demand curve for deodorant shifts to the left.
• B)supply curve for deodorant shifts to the right.
• C)quantity demanded of deodorant decreases, and the quantity of deodorant that firms want to supply increases.
• D)quantity supplied of deodorant stays the same.

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Definitions:

Revenues

The total amount of money generated by a company from its normal business operations, before any costs or expenses are deducted.

Total Liabilities

The sum of all financial obligations or debts that a company owes to outside parties, listed on the balance sheet.

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, representing ownership interest.

Assets

Assets are resources owned by a company or individual that have economic value and can provide future benefits, like cash, inventory, and equipment.