What happens when a price floor is set above the equilibrium price?
a. The quantity demanded will exceed quantity supplied.
b. The quantity supplied will exceed the quantity demanded.
c. It moves the demand curve.
d. It shifts the supply curve.
b. The quantity supplied will exceed the quantity demanded.
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In order to increase economic growth, a government can
A) discourage research and development. B) decrease funding on education. C) discourage specialization and trade. D) establish property rights and a legal system. E) tax saving in order to encourage more spending.
To practice third-degree price discrimination, each of these market conditions must be met except which one?
A) All consumers must have the same own price elasticity of demand. B) No arbitrage opportunities can exist between customer groups. C) The firm must be able to determine in which group each customer belongs. D) The firm must have market power.
The monopolistic competitor's demand curve is more _______ (elastic/inelastic) than a monopolist's demand curve.
Fill in the blank(s) with the appropriate word(s).
Why does the aggregate demand curve slope downward?
What will be an ideal response?