If the Equilibrium Price of Aspirins Is $2

question 117

Multiple Choice

If the equilibrium price of aspirins is $2.50 and a price ceiling is imposed at $3.00, the eventual result after market adjustment will be a(n) :

• A) surplus.
• B) shortage.
• C) accumulation of inventories.
• D) equilibrium.

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Definitions:

Least Squares

A method in statistics for approximating the solution of overdetermined systems, by minimizing the differences between the observed and predicted values.

Simple Linear Regression

A statistical method used to model the relationship between a single independent variable and a dependent variable by fitting a linear equation to observed data.

Normally Distributed

A statistical distribution that is symmetrical about the mean, where most observations cluster around the central peak and the probabilities for values further away from the mean taper off equally in both directions.

Parameters

In statistics, parameters are numerical characteristics of a population, such as its mean or standard deviation.