Which of the Following Occurs If Firms Are Able to Restrict

question 159

Multiple Choice

Which of the following occurs if firms are able to restrict output and raise price?

• A)resources are misallocated
• B)wealth is shifted from consumers to government
• C)wealth is shifted from producers to consumers
• D)P = MC
• E)P = minimum LRAC

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Definitions:

Ability To Pay

A concept referring to an individual's or entity's capacity to cover a financial obligation, often considered in tax policy and healthcare.

Latex Gloves

Elastic gloves made from natural rubber latex, commonly used for protection in medical and industrial settings.

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a given price over a specified period.

Inelastic

Describes a market situation where the demand for a product or service is relatively unchanged by price variations.