If a Price Floor of $23 Were Placed in the Market

question 145

Multiple Choice

If a price floor of $23 were placed in the market in the graph shown:

• A) a surplus of 27 would occur.
• B) a surplus of 37 would occur.
• C) a surplus of 10 would occur.
• D) a surplus of 20 would occur.

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Definitions:

Owner's Capital

The amount of equity in a company that is directly attributable to the owner(s), representing their stake in the company’s assets after liabilities have been subtracted.

Revenue

Income derived from the core business activities of a company, specifically through selling products or services.

Net Income

The residual financial benefit a company holds after reducing total income by all expenditures and tax payments.

Owner's Drawings Account

An account that tracks the funds withdrawn by the owner from the company for personal use.