-Consider the Above Table

question 357

Multiple Choice

-Consider the above table. Assuming the government imposes a price floor on strawberries of $8 per pound, what would be the likely result?

• A) a surplus of 2,000 pounds of strawberries
• B) a shortage of 2,000 pounds of strawberries
• C) No change, equilibrium would prevail.
• D) The quantity demanded of strawberries would fall to zero.

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Definitions:

Net Operating Income

The total profit of a business after operating expenses are subtracted from gross revenue, but before taxes and interest are deducted.

Variable Expenses Per Unit

Costs that change directly in proportion to changes in production or sales volume, calculated on a per unit basis.

Fixed Expenses

Expenses that remain constant regardless of production volume or sales efforts, like lease payments or wages.

Variable Expenses

Costs that fluctuate with production volume or business activity levels, such as materials and labor.