When the Price Is Less Than the Equilibrium Price

question 44

Multiple Choice

When the price is less than the equilibrium price,

• A) the price will be forced higher.
• B) there will be a shortage.
• C) some consumers will be willing to pay a price higher than the prevailing price.
• D) All of the above answers are correct.

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Definitions:

Annuity Contract

A financial product sold by financial institutions that provides a series of payments in exchange for an initial payment.

Annual Return

The percentage change in an investment's value over a year, accounting for dividends, capital gains, and interest earned.

Investment

Assets acquired or money spent in the hope of generating income or profit over time, including stocks, bonds, property, or equipment.

Compound Interest

Interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.