Which of the Following Statements Is Not Generally True of a Production

question 72

Multiple Choice

Which of the following statements is not generally true of a production quota?

• A)The market will not clear due to the excess supply of that good.
• B)Consumer surplus increases when compared to the market before the quota.
• C)Producer surplus may increase or decrease.
• D)Some of the consumer surplus will be transferred to producers.

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Definitions:

Credit Sales

Sales made by a business that do not require immediate payment, allowing the buyer to pay at a later date.

Total Sales

The sum of all sales (or revenue) generated by a business during a specific period, before any deductions.

Cash Received

The money that a business or individual receives during a specific period, including revenues from sales, services, loans, or investments.

Safety Stock

Extra inventory kept on hand to prevent stockouts due to unpredictable demand or delays in supply.