Why Does a Surplus That Occurs Under a Binding Price

question 110

Multiple Choice

Why does a surplus that occurs under a binding price floor increase over time?

• A) Demand becomes more elastic.
• B) Demand becomes more inelastic.
• C) Demand and supply both become more elastic.
• D) Demand and supply both become more inelastic.
• E) Demand becomes more elastic,but supply becomes more inelastic.

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Definitions:

Lifetime Profitability

The total net profit a company expects to earn over the entirety of its business relationship with a customer.

Consumer Needs

The desires, requirements, or necessities that consumers feel compelled to satisfy, driving their purchasing decisions.

Quick Energy

Fast-acting energy sources, often in the form of food or beverages, that provide immediate vitality or stamina.

Supply Chain Management

The administration of goods and services circulation, which includes the transfer and storage of raw materials, inventory in progress, and completed products from the beginning point to the end-use point.