Suppose an Effective Price Ceiling Is Imposed in a Market

question 243

Multiple Choice

Suppose an effective price ceiling 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 ceiling?

• 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:

Product Development

The creation of new products or enhancement of existing ones, from idea through design, testing, and finally to market introduction.

Consultative Leader

A leadership style characterized by seeking input and feedback from team members before making decisions.

Management Fad

A trend or craze in the field of management where a new strategy or concept gains popularity quickly but may not have lasting significance.

Several Styles

Referring to a variety of methods, techniques, or approaches.