In a period of steadily rising prices (meaning the cost to purchase inventory is increasing over time), what would be the implications of choosing FIFO vs. LIFO? Which method would show a higher net income, and which would show a lower net income? Which method does a better job of matching expenses and revenues? Which method reflects the most recent costs of inventory on the balance sheet? What implications might this have that would be relevant for users of the financial statements to know?

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.