What Is the Long-Run Consequence of a Price Floor Law

question 42

Multiple Choice

What is the long-run consequence of a price floor law?

• A) A surplus will continue to exist and will grow larger over time.
• B) A surplus will continue to exist and will grow smaller over time.
• C) A shortage will continue to exist and will grow larger over time.
• D) A shortage will continue to exist and will grow smaller over time.
• E) The amount of the surplus will not change.

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Definitions:

Capital Budgeting

The process of planning and managing a company's long-term investments in projects and assets.

What-If Questions

Hypothetical questions used to explore the effects of changes in variables or conditions, often used in planning and decision making.

Forecasting Risk

The possibility of error in projecting future values such as revenues, costs, or stock prices, due to uncertainty about future events.

Initial Investment

Refers to the initial capital outlay or amount of money invested to start a project or investment.