If a Price Ceiling Is Imposed at $15 Per Unit

question 125

Multiple Choice

If a price ceiling is imposed at $15 per unit when the equilibrium market price is $12,there will be

• A) no surplus or shortage.
• B) a surplus.
• C) a shortage.
• D) a downward pressure on prices.
• E) an upward pressure on prices.

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Definitions:

Exercise Price

The price at which the holder of an option can buy or sell the underlying security.

Cash Dividends

Payments made by a corporation to its shareholder members. It denotes the distribution of a portion of the company's earnings.

Home Mortgage Securitization

The process of bundling home loans into securities that are then sold to investors.

Mortgage Originators

Mortgage Originators are institutions or individuals that work with borrowers to complete a mortgage transaction, including the creation and processing of home loans.