A price ceiling set below the equilibrium price will
A) clear the market for the good.
B) result in a shortage of the good.
C) result in a surplus of the good.
D) induce new firms to enter the industry.
B
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How does a company arrange to sell its products to people who are unwilling to pay the top price for them?
a) by allowing rebates to some preferred customers who buy a lot of goods b) by charging each customer the maximum amount they are willing to pay c) by charging different prices according to the group to which the buyer belongs d) by changing the product and selling a lesser one to people who are unwilling to pay for the top product
Adam is the owner/operator of a flower shop. Last year he earned $250,000 in total revenue. His explicit costs were $175,000 paid to his employees and suppliers (assume that this amount represents the total opportunity cost of these resources). During the year he received three offers to work for other flower shops with the highest offer being $75,000 per year. Which of the following is true about Adam's accounting and economic profit?
A. Accounting profit = $175,000; economic profit = $75,000. B. Accounting profit = $75,000; economic profit = negative $100,000. C. Accounting profit = $0; economic profit = negative $75,000. D. Accounting profit = $75,000; economic profit = $0.