Some Developing Countries Have Used Price Ceilings to Keep Rice

question 7

Multiple Choice

Some developing countries have used price ceilings to keep rice cheap to assist the poor.At the ceiling price:

• A)the quantity demanded will be greater than the quantity supplied and a shortage will result
• B)the quantity demanded will be greater than the quantity supplied and a surplus will result
• C)the quantity demanded will be less than the quantity supplied and a shortage will result
• D)the quantity demanded will be less than the quantity supplied and a surplus will result

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating its ability to meet short-term obligations.

Discount Rate

A discount rate utilized in discounted cash flow assessment for establishing the present worth of expected cash flows.

Annual Operating Cash Inflows

Annual operating cash inflows are the monetary returns received from a company's day-to-day business operations over the course of a year.

Salvage Value

The anticipated market value of an asset at the conclusion of its lifespan.