If a Good Is Subject to a Binding Price Floor

question 131

Multiple Choice

If a good is subject to a binding price floor and someone purchases it on the black market,what would he or she expect to happen to the price over time?

• A) The black market price will rise over time as the supply curve becomes more elastic and the demand curve becomes more inelastic.
• B) The black market price will fall over time as both the supply and demand curves become more inelastic.
• C) The black market price will rise over time as the demand curve becomes more elastic and the supply curve becomes more inelastic.
• D) The black market price will fall over time as both the supply and demand curves become more elastic.
• E) The black market price will not change over time.

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Definitions:

Aided Recall

A memory retrieval process in which cues or prompts are given to assist in recalling specific information or experiences.

Salience

Salience refers to the prominence or importance of an object, concept, or entity within a particular context.

Marketing

The process of promoting, selling, and distributing a product or service, including market research and advertising.

Commoditized

Refers to products or services that are perceived as interchangeable with others in the market, often leading to competition primarily based on price.