-Refer to the Graph Above to Answer This Question

question 35

Multiple Choice

-Refer to the graph above to answer this question.What would be the result if an effective price floor is set which is $2 different from the equilibrium price and demand increased by 30?

• A)The price would be above equilibrium and a surplus of 30 would be produced.
• B)The price would be below equilibrium and a shortage of 30 would be produced.
• C)The price would be above equilibrium and a shortage of 30 would be produced.
• D)The price would be below equilibrium and a surplus of 30 would be produced.

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Definitions:

Charitable Contribution

Donations made to qualified organizations that may be tax-deductible for the donor.

Taxable Income

The amount of income that is subject to tax, after accounting for deductions and exemptions.

FMV

Fair Market Value; an estimate of the market value of a property, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller.

Schedule M-1

A tax form used by corporations to reconcile income reported on the company's financial statements with the income reported on the tax return.