Which of the Following Would Be the Least Likely Result

question 97

Multiple Choice

Which of the following would be the least likely result of a price ceiling imposed in the market for rental cars?

• A) slow replacement of old rental cars with new ones
• B) poor maintenance of the rental cars
• C) dirtier exteriors and interiors of rental cars
• D) free gasoline given to people as an incentive to rent a car

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Definitions:

Ecological Fallacy

The assumption that a generalized cultural value applies equally well to all members of the culture.

Natural Monopoly

A market situation where a single firm can supply a product or service to an entire market at a lower cost than what two or more firms can.

Long Run

In economics, a period during which all inputs, including capital, are variable and firms can enter or exit the industry, allowing full production adjustment.

Average Total Cost

The per unit cost of production, calculated by dividing the total cost by the quantity of output produced.