Quantity Controls Set Below the Equilibrium Quantity Cause All of the Following

question 144

Multiple Choice

Quantity controls set below the equilibrium quantity cause all of the following EXCEPT:

• A) incentives for illegal activities.
• B) missed opportunities in the form of mutually beneficial transactions that don't occur.
• C) the supply price of the quantity transacted exceeding the demand price of the quantity transacted.
• D) quota rents.

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Definitions:

Average Cost Per Unit

The total cost of production divided by the total number of units produced, providing a cost measure per single unit.

Inventory

The goods and materials a business holds for the ultimate goal of resale or production.

Units

A basic measure or quantity of product one of something, often used in the context of production, sales, or inventory.

Inventory Cost Flow

A method used to value and manage inventory, determining the cost of goods sold and ending inventory.