In Order to Be Binding, a Price Ceiling

question 140

Multiple Choice

In order to be binding, a price ceiling

• A)must lie above the free market equilibrium price.
• B)must lie below the free market equilibrium price.
• C)must coincide with the free market equilibrium price.
• D)must be high enough for firms to earn a profit.

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Definitions:

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, often used to assess liquidity and manage cash flow.

Fixed Asset Turnover Ratio

A financial metric that measures how efficiently a company is using its fixed assets to generate sales.

Overall Management

Overall management involves the comprehensive coordination and administration of all aspects of an organization or project, including strategy, operations, finance, and human resources, to achieve its objectives.

Financial Records

Financial records are written accounts of a business's financial activity, including transactions, income, and expenses, essential for tracking financial performance.