When There Is a Binding Price Ceiling

question 40

Multiple Choice

When there is a binding price ceiling,

• A)there is no equilibrium.
• B)the quantity demanded does not equal the quantity supplied.
• C)all potential customers are happy because they can buy the good at a lower price.
• D)producers move production to another country.

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Definitions:

Profit Center

A segment or division of a company that is directly responsible for generating its own revenue and profit.

Cost Center

A department or function within a business to which costs are charged for accounting purposes, but does not directly generate revenue.

Investment Center

A business unit or segment within an organization that is responsible for its own revenues, expenses, and investments in assets.

Gross Profit

The difference between revenue and the cost of goods sold, indicating the efficiency of a company in managing its labor and supplies in the production process.