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Question
One would expect there to be many customers for a black market good when the opportunity cost of finding the good under a
a. binding price floor is high.
b. binding price floor is low.
c. nonbinding price ceiling is high.
d. binding price ceiling is low.
e. binding price ceiling is high.
Answer
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What is the long-run consequence of a price ceiling law?
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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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