Use the Following Information to Answer the Questions That Follow

question 149

Multiple Choice

Use the following information to answer the questions that follow.
Market for flat-screen TVs:
Demand: Qd = 2,600 - 5 P
Supply: Qs = -1,000 + 10 P
-What would be the quantity demanded if a price ceiling is set at $400?

• A) 600
• B) 240
• C) 0
• D) 3,000
• E) 2,400

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Definitions:

External Benefits

Advantages or positive effects that a transaction or activity provides to people not directly involved in it.

Market Price

The current price at which an asset or service can be bought or sold in a specific market.

Market Output

The total amount of goods and services produced and offered for sale by all firms in a particular market.

External Cost

Costs that are not borne by the parties involved in an economic transaction but by other members of society.