A Binding Price Ceiling

question 34

Multiple Choice

A binding price ceiling
(i) Causes a surplus.
(ii) Causes a shortage.
(iii) Is set at a price above the equilibrium price.
(iv) Is set at a price below the equilibrium price.

• A)(ii)only
• B)(iv)only
• C)(i)and (iii)only
• D)(ii)and (iv)only

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Definitions:

Selling Price

The amount a seller charges for a product or service, paid by the buyer.

Marketing Manager

A professional responsible for developing strategies to promote a product, service, or brand to increase sales.

Advertising Budget

An estimate of a company's promotional expenditures over a period. It includes costs related to advertising through various media channels.

Net Operating Income

The profit generated from a company's normal business operations, excluding expenses and revenues that are outside its core business activities.