Both Price Supports and a Price Floor Can

question 232

Multiple Choice

Both price supports and a price floor can

• A) create a deadweight loss.
• B) decrease output below the equilibrium quantity.
• C) decrease the price below the equilibrium price.
• D) increase consumer surplus.
• E) have no effect on producer surplus.

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Definitions:

Statement Of Stockholders' Equity

A financial statement that shows changes in the ownership interest of a company’s shareholders over a reporting period.

Straight-Line Depreciation

A way to distribute the expense of a concrete asset throughout its life expectancy in uniform annual figures.

Present Value Interest Factors

A factor that can be used to calculate the present value of a sum that is to be received in the future.

Guaranteed Residual Value

The predetermined value guaranteed to the lessee by the lessor or a third party, ensuring the asset will have a certain value at the end of the lease term.