Suppose an Effective Price Floor Is Imposed in a Market

question 55

Multiple Choice

Suppose an effective price floor is imposed in a market and leads to the development of an illegal black market for the product. How would the price in the black market compare to the price of the product in the legal market, which has an effective price floor?

• A) The black market price will be higher.
• B) The black market price will be lower.
• C) The black market price will be the same but the quantity sold will be higher.
• D) The black market price will be the same but the quantity sold will be lower.

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Definitions:

Support

Assistance or backing provided by an individual or group to help others in need or to achieve a goal.

Unfreeze

The initial stage of the change process where the goal is to overcome inertia and dismantle existing mindsets.

Motivated To Change

The state of being driven or inclined towards making alterations or adjustments in behavior, situation, or environment.

Perception Of Threat

The subjective assessment of the potential harm or danger that a situation or individual might pose.