Suppose the Equilibrium Price of Oranges Is $0

question 35

Multiple Choice

Suppose the equilibrium price of oranges is $0.79 an orange, but government takes steps to prevent the price from exceeding $0.60 an orange. The likely result will be a:

• A) lower equilibrium price for oranges as the supply curve for oranges shifts to the right.
• B) higher equilibrium price for oranges as the demand curve for oranges shifts to the right.
• C) shortage of oranges as the price ceiling keeps the market from reaching equilibrium.
• D) surplus of oranges as the price ceiling keeps the market from reaching equilibrium.

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Definitions:

Contracts

Legally binding agreements between two or more parties, detailing obligations and rights concerning the exchange of goods, services, or property.

Adults

Individuals who have reached the age of majority, legally recognized as capable of entering into binding contracts and being responsible for their actions.

Illegal Contract

A contract that is void because it involves the performance of an unlawful act.

Prostitution

A practice of engaging in sexual activities in exchange for payment or other benefits.