Refer to the Accompanying Figure

question 68

Multiple Choice

Refer to the accompanying figure. If there is a $700 government-imposed price antigouging law imposed on generators, how will the market be affected in the short run?

• A) There will be a shortage of 200 generators.
• B) There will be a shortage of 100 generators.
• C) The government will intervene and order a surplus of 100 generators.
• D) Price gougers will enter the market and provide a surplus of 100 generators.
• E) No changes will occur in the market, since anti-price-gouging laws are now in effect.

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Definitions:

Mikel Company Bonds

Debt securities issued by Mikel Company to investors, representing loans made by investors to the company.

Purchase

The act of buying goods, services, or assets in exchange for money or its equivalent.

Annual Interest

The total amount of interest to be paid or earned over the course of a year, typically associated with loans or investments.

Eiger Company Bonds

A type of debt security issued by the Eiger Company to raise capital, where the investor is paid interest and the principal is repaid at a future date.