Which of the Following Will Likely Occur When Price Floors

question 85

Multiple Choice

Which of the following will likely occur when price floors in agriculture are implemented?

• A) Quantity supplied will exceed quantity demanded.
• B) Quantity demanded will exceed quantity supplied.
• C) Farmland will be underutilized.
• D) Supply will decrease.

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Definitions:

Internal Growth Rate

The maximum growth rate a company can achieve with its existing assets without having to finance growth with external equity or debt.

Retention Ratio

The portion of net income that is retained by a company instead of being paid out as dividends to shareholders, usually expressed as a percentage.

Plowback Ratio

Also known as the retention rate, it refers to the portion of earnings that a company retains and reinvests in its operations rather than distributing as dividends.

Optimistic Assumptions

Assumptions made under the most favorable conditions, often used in forecasting or planning to predict the best-case scenario outcomes.