In response to a shortage caused by the imposition of a binding price ceiling on a market,
a. price will no longer be the mechanism that rations scarce resources.
b. long lines of buyers may develop.
c. sellers could ration the good or service according to their own personal biases.
A binding price ceiling is when the government or an agency of the government sets the maximum price of a good or service below the equilibrium price.
When price of a good is set below the equilibrium price of the good, the producer surplus would decreases and the consumer surplus would increase. This would lead to an excess of demand over supply. As a result, a shortage would occur. As a result of the shortage, black markets would occur.
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Answer:
Key Points
Explanation:
The government may artificially increase prices through purchasing a portion of the consumer surplus or artificially increase quantity through offering subsidies to producers. This allows the government control over the established equilibrium in agriculture.
Answer:
A). Dependent demand is directly related to the demand of other stock-keeping units (SKUs) and can be calculated without needing to be forecasted.
Explanation:
The first statement asserts a true claim as it correctly states that 'dependent demand is promptly associated to the demand of further SKUs and therefore, it can be measured without requiring any prediction.' Dependent demand is characterized as a demand that is reliant on the other products' demand. This is why such demands are directly influenced by a rise or fall in the other products' demand and <u>this is the reason due to which dependent demand can be calculated easily without any prediction because it will observe a similar impact as its associated product would face</u>. Thus, <u>option A</u> is the correct answer.
Answer:
a.$5 per direct labor hour
Explanation:
The computation of the predetermined overhead rate is shown below:
Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor-hours)
= $100,000 ÷ 20,000 direct labor hours
= $5 per direct labor hour
Simply we divide the total estimated manufacturing overhead by the estimated direct labor hours so that the correct rate can come
All other information which is given is not relevant. Hence, ignored it
