A Binding Price Ceiling Causes Quantity Demanded to Be Less

question 288

True/False

A binding price ceiling causes quantity demanded to be less than quantity supplied.

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Definitions:

Loss Minimization

A strategy in economics and business focused on reducing the losses incurred by a firm or individual to the lowest possible level.

Average Total Cost

The total cost of production divided by the number of goods produced, representing the cost per unit of output.

Marginal Revenue

The additional income from selling one more unit of a good; it is the change in total revenue that comes from selling an additional unit.

Long-run Supply Curve

A graphical representation that shows the relationship between the price of a good and the quantity supplied by producers over a longer period, when all inputs can be fully adjusted.