Suppose the Equilibrium Price of a Tube of Toothpaste Is

question 80

Multiple Choice

Suppose the equilibrium price of a tube of toothpaste is $2,and the government imposes a price floor of $3 per tube.As a result of the price floor,

• A)quantity demanded decreases.
• B)quantity supplied increases.
• C)there is a surplus.
• D)All of the above are correct.

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Definitions:

Income Statement

A financial document that shows a company's revenues, expenses, and net income over a specific period of time.

Revenue Expenditures

Payments made for ordinary maintenance of an asset or unnecessary or unreasonable situations.

Plant Assets

Long-term tangible assets used in the production of goods or services.

Capital Expenditures

Original cost of an asset as well as additions or enlargements, extraordinary repairs, and betterments.