If a Price Floor Is Set at $23 in the Market

question 43

Multiple Choice

If a price floor is set at $23 in the market shown in the graph, the total number of units traded will:

• A)fall by 20, relative to equilibrium.
• B)fall by 27, relative to equilibrium.
• C)fall by 37, relative to equilibrium.
• D)rise by 10, relative to equilibrium.

---

Definitions:

Cost of Goods Manufactured

The total cost incurred to manufacture products, including materials, labor, and overhead, during a specific period.

Finished Goods Inventory

Refers to products that have completed the manufacturing process but have not yet been sold.

Variable Costs

Expenses that vary in direct relation to the volume of production or sales transactions.

Manufacturing Overhead

All production costs other than direct materials and direct labor, including expenses such as maintenance, utilities, and equipment depreciation in a manufacturing setting.