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ella [17]
3 years ago
13

A price ceiling will have NO immediate effect if: a. it is set above the equilibrium price. b. the equilibrium price is above th

e price ceiling. c. it is set below the equilibrium price. d. it creates a shortage.

Business
1 answer:
ioda3 years ago
4 0

Answer:

A. Set above equilibrium price

Explanation:

A price ceiling is a mandatory maximum price that a seller is allowed to charge. Generally, a government may impose this in order to protect consumers, especially with regards to the purchase of essential goods.

If the price ceiling was set below the equilibrium price (option c) or if the equilibrium price is above the price ceiling (option b), it will immediately cause a shortage (option d) since the quantity demanded would be higher than the quantity supplied when the price falls. This is because people will be willing to purchase more since it is cheaper but suppliers will be willing to produce less due to lower profits. Hence, options b, c and d are eliminated.

Option A is correct because... (please refer attached diagram):

When the price ceiling is above the equilibrium price, suppliers are willing to supply more since they can make higher profits but consumers will reduce purchasing since it is expensive. However, it does not cause any immediate effect because it takes time for suppliers to be able to produce more and cannot be done immediately unless anticipated in advance. In the long run however, quantity demanded will fall from equilibrium quantity to D1 and quantity supplied will rise from equilibrium quantity to S1. Hence, causing a surplus between D1 - S1 in the long run.

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Contribution Margin Molly Company sells 37,000 units at $19 per unit. Variable costs are $11.59 per unit, and fixed costs are $1
yarga [219]

Answer:

(a) Contribution margin ratio = 0.39, or 39%

(b) the unit contribution margin = $7.4 per unit

(c) income from operations = $164,470

Explanation:

Total revenue = 37,000 × $19 = $703,000

Total variable cost = 37,000 × $11.59 = $428,830

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(a) the contribution margin ratio

Contribution margin ratio = $274,170/$703,000 = 0.39, or 39%

(b) the unit contribution margin

Unit contribution margin =  $19 - $11.59 = $7.4 per unit

(c) income from operations

Income from operations = $274,170 - $109,700 = $164,470

5 0
3 years ago
As prosperity and economic development rise, ________ increases as well.
crimeas [40]
As prosperity and economic development rise, individualism increases as well.

Individualism refers to the freedom of someones actions. If the economy is doing well and someone has more money, they are more likely to spend their money freely. The person has moral worth as an individual. 
4 0
3 years ago
The common stock of the Avalon Corporation has been trading in a narrow range around $40 per share for months, and you believe i
Monica [59]

Answer:

C. Sell a straddle

Explanation:

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and,

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a short straddle involves simultaneously selling a put option and call option with the same underlying asset, same exercise price and expiration date

By Selling a 3 month put option with exercise price of $40 one will get $3 (inflow of $3)

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g Vaughn Manufacturing purchased a new machine on October 1, 2022 at a cost of $124,800. The company estimated that the machine
Wittaler [7]

Answer:

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Vaughn Manufacturing

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5 0
3 years ago
How to write a table of content ​
zvonat [6]

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