Quantity DemandedPriceQuantity Supplied52$5073624562724051823542923033If government set a maximum price of $45 in the above market:
A. a surplus of 21 units would arise.
B. a shortage of 21 units would arise.
C. it would not change the free market equilibrium.
D. a surplus of 40 units would arise.
Answer: C
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A) the LAS curve shifts. B) the SAS curve shifts. C) the AD curve shifts. D) the macroeconomic equilibrium is unaffected.
If leisure is a normal good, then a decrease in income __________ the time allocated to __________
a. decreases; market work b. decreases; leisure c. decreases; nonmarket work d. increases; leisure e. increases; market work, nonmarket work, and leisure time
Ceteris paribus, in the long run, a tax placed on a perfectly competitive industry will
A. be borne entirely by the firm. B. be entirely borne by the consumer. C. increase the price of the good by an amount less than the tax. D. increase the price of the good by an amount equal to the tax.
In order to be successful in a market economy, entrepreneurs must
What will be an ideal response?