The Likely Result of a Binding Price Floor Is a _____

question 3

Multiple Choice

The likely result of a binding price floor is a _____ of the good at a price _____ the equilibrium price.

• A)surplus;above
• B)shortage;below
• C)surplus;below
• D)shortage;above

---

Definitions:

Creditor

An entity or person to whom money is owed by a debtor for goods supplied or loans given.

Discount Rate

The discount rate is the interest rate used in calculating the present value of future cash flows, often reflecting the risk and time value of money in investment appraisals.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, typically represented as an annual percentage.

Operating Expense

Expenses incurred in the normal operation of a business, excluding the cost of goods sold, such as rent, salaries, and utilities.