If a Binding Price Floor Were Placed in the Market

question 143

Multiple Choice

If a binding price floor were placed in the market shown in the graph:

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

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Definitions:

Marginal Revenue Function

A mathematical representation showing how revenue changes as the quantity of goods sold varies.

Book

A collection of printed or handwritten pages, attached along a single edge and encased in a covering.

Marginal Revenue Function

A calculation used to determine the additional revenue generated by selling one more unit of a good or service.

Demand

An economic principle referring to the consumer's desire and willingness to pay for a specific quantity of a good or service at a given time.