When a Binding Price Ceiling Is Imposed on a Market

question 105

Multiple Choice

When a binding price ceiling is imposed on a market to benefit buyers,

• A)every buyer in the market benefits.
• B)every buyer and seller in the market benefits.
• C)every buyer who wants to buy the good will be able to do so,but only if he waits in long lines.
• D)some buyers will not be able to buy any amount of the good.

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Definitions:

Straight-Line Depreciation

Straight-line depreciation is a technique that spreads the expense of a physical asset evenly across its useful lifespan in uniform yearly instalments.

After-Tax Discount

The reduction in price or cost of an item after accounting for the impact of taxes.

Income Tax Rate

The percentage of earnings taxed on entities or individuals.

Profitability Index

A financial metric used to evaluate the desirability of an investment or project, calculated as the present value of future cash flows divided by the initial investment cost.