If a Price Ceiling Is Set Below the Equilibrium Price

question 42

Multiple Choice

If a price ceiling is set below the equilibrium price in a market,

• A) rationing will be unnecessary.
• B) surpluses of the commodity will develop.
• C) the quantity demanded will exceed the quantity supplied.
• D) the quantity supplied will exceed the quantity demanded.

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Definitions:

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the appropriate periods.

Adjusting Entries

At the conclusion of an accounting cycle, entries are documented in the accounting ledger to distribute revenues and costs to the actual period they happened.

Types

Varieties or classifications into which objects, people, or concepts can be grouped based on shared characteristics.

Profit Margin Ratio

A financial metric used to evaluate a business's profitability by dividing net income by net sales.