Suppose the equilibrium price of a gallon of milk is $4. If the government imposes a price floor of $5 per gallon of milk,
A) the quantity supplied of milk exceeds the quantity demanded.
B) the quantity supplied of milk falls short of the quantity demanded.
C) the supply increases.
D) the market will not be affected.
E) there will be a shortage of milk.
A
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The price elasticity of demand depends on how readily and easily consumers can switch their purchases from one product to another
a. True b. False Indicate whether the statement is true or false
A monopolistic firm will shut down if
A) P < ATC for every level of output. B) P > ATC for every level of output. C) P > AVC for every level of output. D) P < AVC for every level of output.
Monopolistically competitive markets and oligopolies are similar in that
A. the kinked demand curve can be used to analyze the firms' pricing decisions. B. there is mutual interdependence amongst the firms. C. nonprice competition is a tool used. D. the number of firms is identical.
The impact of Hurricane Katrina on consumers in the economy was to make them very pessimistic about their future incomes. How does this increased pessimism affect the aggregate demand curve?
A) This will move the economy up along a stationary aggregate demand curve. B) This will move the economy down along a stationary aggregate demand curve. C) This will shift the aggregate demand curve to the left. D) This will shift the aggregate demand curve to the right.