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Question
Suppose Dawn lives in a community with no price controls. What would she expect to happen if her town borders a community where there is a nonbinding price floor on most products?
a. The products sold will become more plentiful.
b. The products sold will become less plentiful.
c. There will be upward pressure on the prices.
d. There will be downward pressure on the prices.
e. The price and the quantity sold in the community without a nonbinding price floor will be the same as the price and quantity in the community with a nonbinding price floor.
Answer
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