If a Price Ceiling Is to Accomplish Its Intended Goal

question 9

Multiple Choice

If a price ceiling is to accomplish its intended goal of lowering overall spending, which of the following must be true?

• A)Demand must be relatively price inelastic.
• B)Demand must be relative price elastic.
• C)Demand must be perfectly inelastic.
• D)Demand must be perfectly elastic.
• E)Price elasticity of demand has nothing to do with overall spending.

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Definitions:

Manufacturer Profit

The financial gain a manufacturing company obtains from producing and selling its goods, calculated by subtracting costs from revenue.

Retailer Profit

The financial gain that a retailer earns from selling products or services, after subtracting the costs of purchasing or producing those items.

Short Term

A period of time that is immediate or not very long, often referring to plans or investments spanning a few months to a year.

Tailored Sourcing

A sourcing strategy that is customized to fit the specific needs and requirements of a business, often involving close collaboration with suppliers.