Business, 05.11.2019 20:31 medellincolombia99

Suppose the government enacts a price ceiling on ice cream. identify the various potential decisions made by ice cream producers to compensate for the price ceiling and maintain profits.
a. reducing the size of each carton of ice cream
b. lowering the quality of ice cream by using cheaper products
c. discontinuing the production of fancier varieties
e. hiring additional workers at a lower wage in order to meet demand incorrect answer(s)

Answers: 2

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Answer from: jose0765678755

Explanation:

If the government enacts a price ceiling on Ice-Cream,it would mean producer won't be able to sell the ice cream at above the price defined as price ceiling.This point is generally below the equilibrium point in demand-supply curve. This would lead to decrease in supply than the demand of the ice cream ,which would mean the shortage in market.

Now to compensate for the price ceiling and maintain the profit ,they will lower the quality of ice cream by using cheaper products so that the cost of ice cream can come down, also since the price at which it could be sold is limited,they will reduce the size of each carton of ice cream in order to maintain profit . They will also discontinue the production of fancier varieties ,which will reduce the overall input cost of producing ice cream. Although the demand is more,the supply is still less so there is no point of hiring additional worker even at lower wage.

So,

Correct Answer - lowering the quality of ice cream by using cheaper product , reducing the size of each carton of ice cream and discontinuing the production of fancier varieties.

Incorrect answer : hiring additional workers at lower wage in order to meet demand.

Answer from: Quest

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan

Answer from: Quest

It would be option a

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Suppose the government enacts a price ceiling on ice cream. identify the various potential decisions...

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