-Refer to Figure 3

question 116

Multiple Choice

-Refer to Figure 3.15 to answer this question.What would be the result if an effective price ceiling is set that is $2 different from the equilibrium price?

• A)The price would be above equilibrium,and a surplus of 60 would be produced.
• B)The price would be below equilibrium,and a shortage of 60 would be produced.
• C)The price would be above equilibrium,and a shortage of 60 would be produced.
• D)The price would be below equilibrium,and a surplus of 60 would be produced.

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Definitions:

Cost Of Goods Sold

The immediate costs linked to the manufacture of products a business sells, involving material and labor costs.

Net Income

The earnings a company retains after removing all expenses and taxes from its revenue.

Periodic Inventory Method

An accounting method where inventory value and cost of goods sold are determined at the end of an accounting period.

Beginning Inventory

The price of items up for sale at the onset of a fiscal period.