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Question
Refer to the accompanying figure to answer the following questions.
The market is currently at market equilibrium. If a binding price ceiling of P1 is imposed, by how much would the quantity supplied change?
a. It would increase by 32,000 units.
b. It would decrease by 18,000 units.
c. It would decrease by 30,500 units.
d. It would decrease by 30,000 units.
e. It would decrease by 32,000 units.
Answer
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Related questions
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When the price elasticity of demand is elastic, a consumer is
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If the price elasticity of demand for Good A is - 0.2 and the price increases from $2.25 to $2.75, the percentage change in the quantity demanded of Good A is
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Price gouging laws will usually result in ________ the product in the distressed market.
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The economic entity most likely to engage in price gouging is
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What will an individual do differently as a buyer in the black market in the long run?
a. He or she will substitute away from the product.
b. He or she will substitute toward the product.
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d. When a binding price ceiling exists, he or she will be willing to pay a lower price.
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Q:
What is the long-run consequence of a price ceiling law?
a. A surplus will continue to exist and will grow larger over time.
b. A surplus will continue to exist and will grow smaller over time.
c. A shortage will continue to exist and will grow larger over time.
d. A shortage will continue to exist and will grow smaller over time.
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Q:
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?
a. Prices in the legal market in the community with a binding price ceiling will rise.
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