If government legislates a price floor that is below the equilibrium price
A. a shortage will develop.
B. a black market will soon develop.
C. a surplus will develop.
D. market price and quantity sold will be unaffected.
D. market price and quantity sold will be unaffected.
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If you expect a general price increase of 5% this year and the price of the hamburgers you sell increases by 10%, you would conclude that the relative price of your good has
A) declined, and you would increase your output. B) declined, and you would decrease your output. C) increased, and you would increase your output. D) increased, and you would decrease your output.
Mike Miller is the town manager of Medfield, a town with 50,000 residents. At a recent town meeting, several citizens proposed building a large public swimming pool in the center of town for all of the residents to enjoy. A survey of all 50,000 residents revealed that the pool would be worth $50 to each of them. Because the cost to build the swimming pool is only $1,000,000 . Manager Miller
arranges to have the pool built. Everyone in town enjoys the pool, but when Manager Miller asks for donations to pay for the pool, he only collects $250,000 . Manager Miller soon realizes that a. the survey was conducted improperly. b. the cost of the pool exceeded the social benefits. c. the pool is a club good. d. most residents of the town are probably free-riders at the pool.
Exhibit 5-2 Price and quantity demanded data Price Quantity Demanded 5 20 4 25 3 30 2 35 1 40 Using Exhibit 5-2, what is the price elasticity of demand when the price falls from five dollars to four?
A. 1. B. 1.25. C. 0.8. D. 2.0.
The hand soap industry is an example of a(n) ________ industry.
A. monopolistically competitive B. monopolistic C. perfectly competitive D. oligopolistic