Use the Following to Answer Questions

question 81

Multiple Choice

Use the following to answer questions:
Figure: Costs of Price Ceilings
-(Figure: Costs of Price Ceilings) Refer to the figure. What is the dollar amount of lost consumer surplus if a price ceiling of $4 is implemented?

• A) $20
• B) $10
• C) $90
• D) $80

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Definitions:

Cash Basis

An accounting method where revenue and expenses are recognized only when cash is received or paid.

Revenues

The total amount of money received by a company from its business activities, such as sales of products or services, before any deductions.

Revenue Recognition Principle

An accounting principle that determines the specific conditions under which revenue is recognized and recorded.

Unearned Revenues

Money received by a company for a service or product that has yet to be delivered or provided.