A price floor above the market clearing price typically results in
I. an excess quantity supplied
II. a shortage
III. an excess quantity demand
A) I only
B) II only
C) III only
D) II and III only
Answer: A
You might also like to view...
A perfectly competitive firm earns a profit when price is
A) equal to minimum average variable cost. B) above minimum average total cost. C) equal to minimum average total cost. D) equal to minimum average fixed cost.
If the interest rate is 7 percent on euro-denominated assets and 5 percent on dollar-denominated assets, and if the dollar is expected to appreciate at a 4 percent rate, for Francois the Frenchman the expected rate of return on dollar-denominated
assets is A) 11 percent. B) 9 percent. C) 5 percent. D) 3 percent. E) 1 percent.
A group of farmers in southwestern Pennsylvania selling locally raised natural beef would be identified as a
a. not-for-profit organization b. S corporation c. producer cooperative d. sole proprietorship e. cottage industry
Monopolistically competitive firms ignore the effect of their decisions upon other firms in the industry because
a. each firm is large relative to the market b. each firm is small relative to the market c. there are few sellers in the market d. there is only one seller in the market e. all firms follow the same known pricing rules