Use the Data in the Following Table to Explain the Economic

question 30

Essay

Use the data in the following table to explain the economic effects of a price ceiling at $6,at $5,and at $4.

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Definitions:

Profit Margin

A financial ratio that shows the percentage of sales revenue that remains as profit after all costs and expenses are deducted.

Net Income

The amount of money remaining after all operating expenses, taxes, and costs have been subtracted from total revenues.

Sales

Sales refer to the revenue earned from selling goods or services over a period of time.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period.