Figure 6-8 -Refer to Figure 6-8.When a Certain Price Control Is Imposed

question 89

Multiple Choice

Figure 6-8
-Refer to Figure 6-8.When a certain price control is imposed on this market,the resulting quantity of the good that is actually bought and sold is such that buyers are willing and able to pay a maximum of P₁ dollars per unit for that quantity and sellers are willing and able to accept a minimum of P₂ dollars per unit for that quantity.If P₁ - P₂ = $3,then the price control is

• A)a price ceiling of $2.00.
• B)a price ceiling of $5.00.
• C)a price floor of $5.00.
• D)either a price ceiling of $2.00 or a price floor of $5.00.

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Definitions:

Transfer of Accounts Receivable

The process of selling or assigning the right to collect on outstanding invoices to another party.

Transferee

An individual or entity that receives the transfer of assets, rights, or interests from another party.

Transferor

The entity or person that transfers assets, obligations, or rights to another party.

Allowance Method

An accounting technique that estimates and deducts accounts receivable that are not expected to be collected to better represent net realizable values.