Figure 4-15 -In Figure 4-15, Suppose a Price Floor Is Established at Is

question 46

Multiple Choice

Figure 4-15
-In Figure 4-15, suppose a price floor is established at $20.00. What is the result?

• A) a shortage of 10 units
• B) a surplus of 10 units
• C) a shortage of 20 units
• D) a surplus of 20 units
• E) there is no change from the situation that exists at the equilibrium price

---

Definitions:

Perfectly Inelastic Demand

Product or resource demand in which price can be of any amount at a particular quantity of the product or resource that is demanded; when the quantity demanded does not respond to a change in price; graphs as a vertical demand curve.

Perfectly Elastic Demand

Product or resource demand in which quantity demanded can be of any amount at a particular product or resource price; graphs as a horizontal demand curve.

Graphed

A method of representing data visually using charts or plots to illustrate relationships between different variables.

Price Elasticity of Supply

A measure of how much the quantity supplied of a good responds to a change in its price.