Suppose Current Equilibrium Price of Pizza Is $5

question 33

Multiple Choice

Suppose current equilibrium price of pizza is $5.If the government decides the price of pizza cannot rise above $4,there would be:

• A)a shortage of pizzas.
• B)a surplus of pizzas.
• C)a rightward shift of the supply curve of pizzas.
• D)no impact on the equilibrium price and quantity of pizzas.
• E)a rightward shift in the demand curve for pizzas.

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Definitions:

After-Tax Discount Rate

A discount rate that takes into account the effect of taxes when evaluating the net present value of investments or projects.

Straight-Line Depreciation

A method of calculating the depreciation of an asset, which evenly spreads the cost over its useful life.

Initial Investments

The initial amount of money spent to start a project, purchase an asset, or establish a business venture, often before earning any returns.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquid funds available for operations.