An Effective Price Ceiling Usually Generates

question 309

Multiple Choice

An effective price ceiling usually generates

• A) fire sales as firms try to unload their excess inventories.
• B) higher nominal prices.
• C) the use of nonprice rationing devices.
• D) happy sellers and dissatisfied buyers.

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Definitions:

Net Income

The final amount a company earns after removing all outgoings and tax liabilities from its total income.

Indirect Method

A way of preparing a cash flow statement where net income is adjusted for changes in balance sheet accounts to reflect cash transactions.

Sale Of Fixed Assets

The process of selling long-term assets such as property, plant, and equipment for cash or other compensation.

Operating Activities

Business functions related to the core operations of a company, generating the majority of its revenue and expenses.