1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
xxMikexx [17]
3 years ago
6

A student makes the following​ argument: ​"A price floor reduces the amount of a product that consumers buy because it keeps the

price above the competitive market equilibrium. A price​ ceiling, on the other​ hand, increases the amount of the product that consumers buy because it keeps the price below the competitive market​ equilibrium." Do you agree with the​ student's reasoning?
Business
1 answer:
Fed [463]3 years ago
3 0

Answer:

The answer is: Yes, the student is right.

Explanation:

Some industries, especially agriculture, work on some unique ways due to their complexity. For instance, the government sets the price floor and the price ceiling for the main crops produced in the country. In order to do this, the government owns and manages huge warehouses and silos.

When the production of crops is higher than usual, the price of that crop will tend to drop because of excessive supply. The government then buys the crop to put a price floor and takes the overstock to its warehouses. That enables the government to control the market so that farmers get a "fair price" for their crops. If the government didn´t do anything, farmers would lose a lot of money and their customers (agricultural corporations) would probably overstock. That at the same time would cause further problems in the future due to lower future sales because the agricultural corporations companies are overstocked.  

When farmers have a bad year due to drought or flooding, their production levels will fall, so the price of the crops would rise due to excessive demand. Then the government sells the crops it had stored previously in its warehouses to put a price ceiling. If the government didn´t do this then a lot of poor people would not be able to buy enough quantities of food.  

You might be interested in
North Around, Inc. stock is expected to return 22 percent in a boom, 13 percent in a normal economy, and −15 percent in a recess
almond37 [142]

Answer:

4.53%

Explanation:

Data provided in the question:

Expected return = ∑ (Return × probability)

Thus,

Expected return = (0.06 × 22) + (0.92 × 13) + (0.02 × (-15))

= 12.98%

Now,

Probability       Return        Probability × (Return-Expected Return)²

0.06                  22                   0.06 × (22% - 12.98%)² = 4.8816

0.92                  13                    0.92 × (13% - 12.98%)² = 0.000368

0.02                  -15                   0.02 × (-15% - 12.98%)² = 5.657608

========================================================

                                                                            Total = 20.5396%

Standard deviation = \sqrt{\frac{\text{Total probability}\times(\text{Return-Expected Return})^2}{\text{Total probability}}

= √(20.5396)

= 4.53%

6 0
3 years ago
On October 31, 20X5, West Company received a condemnation award of $450,000 as compensation for the forced sale of a warehouse.
Luba_88 [7]

Answer:

$175,000

Explanation:

Calculation to determine West should report on its income statement for the year ended December 31, 20X5, a gain on condemnation of property of

Using this formula

Gain on condemnation=Compensation for the forced sale-Book value

Let plug in the formula

Gain on condemnation=$450,000-$275,000

Gain on condemnation=$175,000

Therefore what should report on its income statement for the year ended December 31, 20X5, a gain on condemnation of property of $175,000

6 0
2 years ago
Dee Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. She borrows$4,000from her bro
levacccp [35]

Answer:

A. The stock is purchased for $40 x 300 shares = $12,000.

Given that the amount borrowed from the broker is $4,000, Dee's margin is the initial purchase price net borrowing: $12,000 - $4,000 = $8,000.

B. If the share price falls to $30, then the value of the stock falls to $9,000. By the end of the year, the amount of the loan owed to the broker grows to:

Principal x (1 + Interest rate) = $4,000 x (1 + 0.08) = $4,320.

The value of the stock falls to: $30 x 300 shares = $9,000.

The remaining margin in the investor's account is:

Margin on long position = "Equity in account " /"Value of stock"

= "$9,000 - $4,320" /"$9,000" = 0.52 = 52%

Therefore, the investor will not receive a margin call.

C. Rate of return = "Ending equity in account - Initial equity in account" /"Initial equity in account"

= "$4,680 - $8,000" /"$8,000" = - 0.4150 = - 41.50%

7 0
3 years ago
Sorry, I withdraw my question.
guajiro [1.7K]

Answer: >?

Explanation:

8 0
2 years ago
Read 2 more answers
The manufacturing overhead budget at Cutchin Corporation is based on budgeted direct labor-hours. The direct labor budget indica
Setler [38]

Answer:

$59,080

Explanation:

The calculation of September cash disbursements is shown below:-

September cash disbursement = Company's budgeted fixed manufacturing overhead - Depreciation + Variable manufacturing overhead

= $43,120 - $3,640 + $7.00 × 2,800

= $43,120 - $3,640 + $19,600

= $62,720 - $3,640

= $59,080

Therefore for computing the September cash disbursement we simply applied the above formula.

4 0
2 years ago
Other questions:
  • Lounge Lizard, a website and mobile app design company for small businesses, receives the majority of its new customer leads fro
    15·1 answer
  • Which neca committee is responsible for the production of the magazine the quality connection?
    13·1 answer
  • If you rent a car, you can (1) return it with a full gas tank, (2) return it without filling it and pay $5.20/gallon, or (3) acc
    15·1 answer
  • What most likely caused the steady increase in price per barrel of oil between 2001 and 2008? a global recession scarcity of pet
    5·2 answers
  • Which relationship BEST illustrates a comparison of absolute advantage and comparative advantage? A) A country with an absolute
    11·2 answers
  • Business had been humming along just fine until the recession hit. Peterbilt adjusted by laying off employees until the recessio
    9·1 answer
  • A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain
    7·1 answer
  • Suppose there is a rash of pickpocketing. As a result, people want to keep less cash on hand, decreasing the demand for money. A
    11·2 answers
  • How do long-term goals differ from short-term goals?
    13·1 answer
  • Clare sells gourmet boxes of chocolates. One box of chocolates costs Nancy $6.75 to produce. She sells her boxes of chocolate fo
    11·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!