Producers May Supply a Good with Inefficiently High Quality If

question 41

Multiple Choice

Producers may supply a good with inefficiently high quality if the government imposes:

• A) a price ceiling set above the equilibrium price.
• B) a price floor set below the equilibrium price.
• C) a binding price floor.
• D) a binding price ceiling.

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Definitions:

Irrational

Characterized by actions or thoughts that lack reason or sound judgment, often driven by emotions rather than logical reasoning.

Emotional Part

A component of human psychology that involves feelings, moods, and affective states.

Rational Part

The aspect of the human mind or personality that is responsible for logic, reasoning, and analytical thought.

Id

In psychoanalytic theory, the part of the psyche that is the source of instinctual drives and desires, operating on the pleasure principle.