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Question
A professional hockey arena has a maximum seating capacity of 20,000 people. The price elasticity of supply is
a. perfectly inelastic.
b. perfectly elastic.
c. inelastic.
d. relatively elastic.
e. elastic.
Answer
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Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
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