All categories

3 years ago

A price ceiling creates a shortage when it is set

Business

1 answer:

Setler [38]3 years ago

7 0

Answer:

D. lower than the equilibrium price.

Explanation:

Markets are at equilibrium where demand = supply & demand, supply curves intersect.

Price ceiling is maximum price mandated by the government at which a good can be sold in the market. It is usually below equilibrium price, set to bring necessity goods under affordable price bracket of poor people.

This artificially reduced price creates excess demand or shortage (less supply), because at the lower price - demand is more but supply is less.

For more , refer : brainly.com/question/14580944#

You might be interested in

When Patey Pontoons issued 6% bonds on January 1, 2018, with a face amount of $600,000, the market yield for bonds of similar ri

Sliva [168]

Answer:

1.- issued at : $579,378

2.- the schedule is attached.

3 and 4.- journal entries

cash 579,378 debit

discount on bonds payable 20,622 debit

bonds payabe 600,000 credit

--to record issuance-------

interest expense 20278.23 debit

discount on bonds payable 2278.23 credit

cash 18000 credit

--to record June 30th payment---

5.-At December 31th 2018 will report as follow:

bonds payable 600,000

discount on bonds (15,986)

net 584,014

6.- it will report interest expense for:

20,278.23 June

20,357.97 December

total: 40.636,2‬

7.- maturity:

interest expense 20,898.55

discount on bonds payable 2,898.55

cash 618,000

Explanation:

For the value of the bonds at issuance, we will calcualtethe present value of the coupon payment and the maturity at market rate.

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 18,000 ( 600,000 x 0.06/2)

time 8 (4 years x 2 payment per year

rate 0.035(market rate / 2)

$18000 \times \frac{1-(1+0.035)^{-8} }{0.035} = PV\\$

PV $123,731.1997

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 600,000.00

time 8.00

rate 0.035

$\frac{600000}{(1 + 0.035)^{8} } = PV$

PV 455,646.93

PV c $123,731.1997

PV m $455,646.9337

Total $579,378.1334

for the schedule we will multuply the carrying value by the market rate.

the ncompare with the proceed in cash to know the amortizaiton.

This amortization will increase the carrying value of the loan.

5 0

2 years ago

A computer company's yearly inventory cost is 40 percent (which accounts for the cost of capital for financing the inventory, wa

aksik [14]

Inventory Costs plays a major role in ascertaining working capital requirements as well structuring cash flow statement.

Explanation:

In the given example,

inventory cost 40 percent

Inventory Value $400 million

Ratio of inventory cos ts to inventory value = Inventory Cost / Inventory Value .

so in the current case it will be 40% x/$400 million

Hence, Inventory Cost 160 Million

Since the cost is fairly on a higher side at 40$ it should try to reduce it which will help in improving its bottom-line.

Company should focus on offering on discounts and promotions and reduce Obsolete Stock.

It should work on restructuring and organizing warehouse costs by prioritizing inventory based on their movements.

The procurement team should order in minimum quantities and benchmark reorder point.

3 0

2 years ago

Mary has a few specific items she would like to leave to her sister, Ann. She would like to leave the balance of her estate to h

k0ka [10]

Answer:

The residuary clause

Explanation: As Mary would like to leave the balance of her estate to her brother tom this will fall under the residuary clause.

4 0

2 years ago

Bill received an unordered calendar from the local charity so he must pay money to the charity.

torisob [31]

Answer:

false, they sent the calendar hoping he would make a donation, but he does not have to give any money

Explanation:

they sent the calendar hoping he would make a donation, but he does not have to give any money

8 0

3 years ago

Sporting goods charges .85 percent interest per month. what rate of interest are its credit customers actually paying?

seraphim [82]

To answer this item, we assume that the interest rate is simple, such that the yearly rate was only divided by 12 months in order to determine the rate per month. Hence, to answer this item, we simply have to multiply the given percent by 12.

rate of interest/year = (12)(0.85%) = 10.2%

Therefore, the answer is 10.2%.

8 0

3 years ago