Why Do Shortages Develop Under a Binding Price Ceiling

question 55

Multiple Choice

Why do shortages develop under a binding price ceiling?

• A) It encourages sellers to produce more of the product.
• B) It encourages buyers to purchase less of the product.
• C) It makes the price so low that the quantity demanded exceeds the quantity supplied in the legal market.
• D) It makes the price so low that the quantity demanded exceeds the quantity supplied on the black market.
• E) It encourages sellers to increase the quality of the product they sell, which, in turn, increases the quantity demanded.

Recognize the legal avenues and remedies available for managing and resolving internal corporate disputes.

Understand the roles and responsibilities of corporate officers and the certification of corporate records.

Comprehend the default purpose clause of a corporation and how corporations may engage in lawful business activities.

Recognize the legal implications of corporate actions in violation of laws and the principle of corporate criminal liability.

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Definitions:

Spur Gears

A type of gear with straight teeth mounted on a parallel shaft, used for transmitting motion and torque.

Pitch Diameter

The diameter of an imaginary circle on a gear or screw, where the width of the gear tooth and the space between teeth are equal.

Reciprocating Motion

A type of mechanical motion where an object moves back and forth along a straight path, common in pistons and pumps.

Linear Motion

Motion in a straight line and in one direction, characterized by a constant velocity unless acted upon by external forces.