An Unintended Consequence of Price Ceilings Is

question 107

Multiple Choice

An unintended consequence of price ceilings is:

• A) the loss of surplus always outweighs the benefits of the policy.
• B) non-price rationing must occur, and can lead to bribes.
• C) the transfer of surplus from producer to consumer rarely is recognized.
• D) the producers increase the quality of the goods sold.

---

Definitions:

Other Expenses

Costs not directly related to the production of goods or services, such as interest payments or losses from asset sales.

Activity Variance

The difference between the budgeted amount of activity and the actual amount of activity, often analyzed in budgeting and costing practices.

Selling

The act of transferring ownership of a product or service from one entity to another in exchange for money, goods, services, or other forms of value.

Administrative Expense

Costs related to the general operation of a business that cannot be directly linked to any specific business activity, product, or service.