Price ceilings keep market price
A. above the equilibrium price and create surpluses.
B. above the equilibrium price and create shortages.
C. below the equilibrium price and create surpluses.
D. below the equilibrium price and create shortages.
D. below the equilibrium price and create shortages.
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Find the real exchange rate for the following case: Assume that the representative basket of European goods and services costs 40 euros and the representative U.S
basket costs $50, and the dollar/euro exchange rate is $0.90 per euro, then the price of the European basket in terms of U.S. basket is ________.
Vertical contracts between manufacturers and retailers often aim to
a. Prevent the retailers from defeating upstream price discrimination through arbitrage b. Reward the manufacturer for undertaking the risk inherent in introducing a new product c. Serve as a "signal" of the retailer's belief of the likely success of his product d. All of the above
Under perfect competition and monopolistic competition, profits are zero in long-run equilibrium.
Answer the following statement true (T) or false (F)
Suppose the DeBeers company exercises monopoly power in the distribution of diamonds. This year, the company earns economic profits and maximizes profit. This implies that the price of diamonds per carat will
a. exceed the marginal cost of diamonds, but be equal to the average cost of diamonds. b. be equal to the marginal cost of diamonds. c. exceed both the marginal cost and average cost of diamonds. d. be equal to the average cost of diamonds.