If the Price Ceiling Is Set Below the Equilibrium Price

question 58

Multiple Choice

If the price ceiling is set below the equilibrium price,

• A) quantity demanded will equal quantity supplied.
• B) there will be a surplus.
• C) there will be a shortage.
• D) demand will be less than supply.

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Definitions:

Depreciation

The accounting process of allocating the cost of a tangible asset over its useful life, reflecting wear and tear, age, or obsolescence.

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating the short-term liquidity position.

Tax Rate

The rate designated by the state to collect taxes from the profits or income of individuals or firms.