A market failure is most likely to occur when:
A. many producers produce identical products, and only the consumers and producers are affected by the transactions.
B. several producers of a good search for the lowest-cost method of production.
C. a sole producer of a good faces no threat of competition.
D. several producers of a good compete for customers by having price wars.
Answer: C
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If the velocity of circulation is 10 and the money supply is $250, the value of transactions will be $25
a. True b. False Indicate whether the statement is true or false
In the graph shown above, if the government set a price ceiling of $18
A. the price would rise to the equilibrium price.
B. the price would fall to equilibrium price.
C. there would be a temporary shortage, then price would rise to equilibrium price.
D. there would be a permanent shortage, at least until the price ceiling was lifted.
The points on a production possibilities curve show
A. Actual output. B. Desired output. C. Potential output. D. None of the choices are correct.
The equilibrium price is sometimes called the:
A. market-clearing price. B. maximum price. C. optimum price. D. quantity-clearing price.