Suppose the Demand for Eggs Is Inelastic and That the Market-Clearing

question 41

Multiple Choice

Suppose the demand for eggs is inelastic and that the market-clearing price is $1.50 per dozen.Now suppose the government imposes a minimum price of $2.00 per dozen.Why might the government implement such a policy?

• A)to make consumers better off
• B)to increase the incomes of egg farmers
• C)to increase excess demand in the egg market
• D)to reduce excess supply in the egg market
• E)to decrease tax revenues from egg farmers

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Definitions:

Histograms

Graphical representations of the distribution of numerical data, showing the frequency of data within certain ranges.

Empirical Rule

A statistical norm that asserts for a normally distributed set of data, almost all of the data points are encompassed within three standard deviations from the mean value.

Sample Variance

The measure of dispersion of sample data points around the sample mean, providing an estimation of the population variance.

Sample Standard Deviation

A measure of the dispersion or variability of a set of sample data points around its mean.