Which of the Below Is True

question 226

Multiple Choice

Which of the below is true?

• A)​A price ceiling reduces the quantity exchanged on the market, but a price floor increases the quantity exchanged on the market.
• B)​A price ceiling increases the quantity exchanged on the market, but a price floor decreases the quantity exchanged on the market.
• C)​Both price floors and price ceilings reduce the quantity exchanged in the market.
• D)​Both price floors and price ceilings increase the quantity exchanged in the market.

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Definitions:

Cost of Goods Sold

The total direct costs attributable to the production of goods sold by a company, including materials and labor.

Fixed Overhead

Regular, consistent expenses associated with operating a business such as rent, utilities, and insurance that do not vary with production volume.

Direct Labor

The wages and benefits paid to workers who are directly involved in the production of goods or the provision of services.

Raw Material

The basic material from which a product is made, typically unprocessed or minimally processed.