Figure 4-17
Refer to . Suppose a price floor of $7.00 is imposed. As a result,
a.
buyers' total expenditure on the good decreases by $20.00.
b.
the supply curve will shift to the left so as to now pass through the point (Q = 40, P = $7.00).
c.
the quantity of the good demanded decreases by 20 units.
d.
the price of the good continues to serve as the rationing mechanism.
a
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