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3 years ago

What is the incentive to create a black market when a binding price ceiling exists?

Business

1 answer:

ivanzaharov [21]3 years ago

7 0

Answer:

The correct answer is option c.

Explanation:

A price ceiling shows the maximum price that a firm or supplier ca charge for its product in the market. The government generally imposes price ceilings to keep necessities affordable for the common people. A binding price ceiling is a situation where the price ceiling is fixed below the market equilibrium price.

At the binding price, there is excess demand. This is because at a lower price the consumers will demand more but the producers will supply less, because of the law of demand and law of supply.

In this situation, a black market emerges because the firms or sellers want to sell their high-quality goods at a higher price than that fixed by the government.

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Ben's Bagels charges $10 per dozen bagels and he sells 30 dozen bagels each day. Ben's costs of production total $150 each day.

xz_007 [3.2K]

Answer:

$150

Explanation:

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3 years ago

A machine costs $260,000 to purchase and will provide $60,000 a year in benefits. The company plans to use the machine for 12 ye

MaRussiya [10]

Answer:

$133,828.98

Explanation:

The computation of the net present value is shown below:

Year Cash flows Discount factor Present value

0 $260,000.00 1 $260,000.00 (A)

1 $60,000.00 0.9009009009 $54,054.05

2 $60,000.00 0.8116224332 $48,697.35

3 $60,000.00 0.7311913813 $43,871.48

4 $60,000.00 0.6587309741 $39,523.86

5 $60,000.00 0.5934513281 $35,607.08

6 $60,000.00 0.5346408361 $32,078.45

7 $60,000.00 0.4816584109 $28,899.50

8 $60,000.00 0.4339264963 $26,035.59

9 $60,000.00 0.3909247714 $23,455.49

10 $60,000.00 0.3521844788 $21,131.07

11 $60,000.00 0.3172833142 $19,037.00

12 $75,000.00 0.2858408236 $21,438.06

Total present value $393,828.98 (B)

Net present value $133,828.98 (B - A)

The discount is come from

= 1 ÷ (1 + rate) ^ years

4 0

3 years ago

Opera Corp. uses dollar-value LIFO method of computing its inventory cost. Data for the past three years is as follows: Year end

Margaret [11]

Answer:

$1,257,750

Explanation:

Year ended inventory at price end-of-year prices index

December 31

2016 $650,000 1.00

2017 $1,260,000 1.05

2018 $1,350,250 1.10

2016 $650,000 / 1 = $650,000

2017 $1,260,000 / 1.05 = $1,200,000

$1,200,000 - $650,000 = $550,000 x 1.05 = $577,500

$1,227,500

2018 $1,350,250 / 1.05 = $1,227,500

$1,227,500 - $650,000 - $550,000 = $27,500 x 1.1 = $30,250

$1,257,750

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4 years ago

Market intelligence research defines the____ and_____ of a market.

BartSMP [9]

Answer:

dja-xizd-mku G meet code

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3 years ago

Read 2 more answers

A customer believes ABC's stock price will rise, but she does not currently have the money to buy 100 shares. How could the cust

Varvara68 [4.7K]

Answer:

The customer could buy call options and sell put options.

Explanation:

A call option gives you the right to buy a stock at a certain price. If the price of a stock rises (as the investor believes), the call option can be exercised and a profit will be made.

A put option gives you gives you the right to sell at a certain price. If the price of a stock rises (as the investor believes), the put option will not be exercised since the sales price will be lower than the market price.

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3 years ago