On May 2, a fire destroyed the entire merchandise inventory on hand of Sanchez Wholesale Corporation. The following information is available: Sales, January 1 through May 2 $ 360,000 Inventory, January 1 80,000 Merchandise purchases, January 1 through May 2 (including $40,000 of goods in transit on May 2, shipped f. o.b. shipping point) 330,000 Markup percentage on cost 20% What is the estimated inventory on May 2 immediately prior to the fire

d. all of the above are true.

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.