When Prices in a Market Are Fixed Either Above or Below

question 144

Multiple Choice

When prices in a market are fixed either above or below the equilibrium price, what is the result?

• A) When price is set above, there is a surplus; and when price is set below, there is a shortage.
• B) When price is set above, there is a shortage; and when price is set below, there is a surplus.
• C) When price is set above, there is a surplus; and when price is set below, there is a surplus.
• D) When price is set above, there is a shortage; and when price is set below, there is a shortage.

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Definitions:

Tracking Inventory

The process of monitoring the quantity, location, and status of products available within a business to manage supply levels efficiently.

Merchandising Company

A business that purchases finished products and sells them to consumers without altering the form of the goods.

Revenue Recognition Standards

Guidelines that dictate how and when revenue should be recorded and recognized on the financial statements to ensure consistency and comparability across different businesses.

Sales Discounts

Reductions in the price of goods or services offered to customers to prompt early payment or bulk purchases.