If a Binding Price Ceiling Is Set in the Market

question 93

Multiple Choice

If a binding price ceiling is set in the market shown in the graph:

• A) quantity demanded will exceed quantity supplied.
• B) quantity supplied will exceed quantity demanded.
• C) the demand curve will have to shift.
• D) the supply curve will have to shift.

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Definitions:

Metamorphosis

A profound change in form from one stage to the next in the life history of an organism, as from caterpillar to butterfly.

Larva

The immature, wingless, and often worm-like stage in the life cycle of insects, before they transform into adults.

Pupa

A transitional stage of a developing insect, after larva and before adulthood, during which it undergoes transformation.

Cocoon

A protective casing spun by the larvae of many insects, inside which they undergo metamorphosis into their adult form.