In a competitive market, the market demand is Qd = 70 - 3P and the market supply is Qs = 6P. A price ceiling of $4 will result in a
A. surplus of 34 units.
B. surplus of 58 units.
C. shortage of 34 units.
D. shortage of 24 units.
Answer: C
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Using the data in the above table, at the price of $80 a phone, a
A) shortage of 25 thousand cellular telephones occurs. B) surplus of 80 thousand cellular telephones occurs. C) surplus of 25 thousand cellular telephones occurs. D) shortage of 55 thousand cellular telephones occurs.
A change in input prices has no impact on a firm’s budget line.
Answer the following statement true (T) or false (F)
The Coase theorem will hold only if:
A. government will provide free mediation. B. the transactions costs are clearly identified and assigned. C. the contracts are enforceable. D. None of these statements is true.
Drug prohibition is likely to increase drug-industry revenue because the demand for drugs is inelastic.
a. true b. false