With a Price Ceiling Above the Equilibrium Price

question 50

Multiple Choice

With a price ceiling above the equilibrium price,

• A) quantity demanded would exceed quantity supplied.
• B) quantity supplied would exceed quantity demanded.
• C) the market would be in equilibrium.
• D) the equilibrium price would be expected to fall over time.

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Definitions:

Trading Securities

Short-term investments in debt or equity securities that a company intends to sell within a short period to generate profits on short-term price differences.

Comprehensive Income

Total non-owner changes in equity for a reporting period, which includes all recognized income and expenses, including those not included in the net income.

Unrealized Gain

The increase in value of an asset or investment that has not yet been sold for cash, and thus, the gain is not yet realized.

Available-for-Sale Investments

Financial assets not classified as held-to-maturity or trading securities, which can be sold in response to liquidity needs or changes in interest rates.