Exhibit 4-4 Refer to Exhibit 4-4. Which of the Following Statements Is

question 69

Multiple Choice

Exhibit 4-4
Refer to Exhibit 4-4. Which of the following statements is false ?

• A)Graph (1): A price ceiling set at P₂ would not have an impact on the market.
• B)Graph (2): As supply increases, equilibrium price remains constant.
• C)Graph (3): As demand increases, equilibrium quantity remains constant.
• D)Graph (4): As supply increases, equilibrium quantity increases.

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Definitions:

Regulatory Changes

Modifications or updates in laws and regulations that affect how businesses operate and compete.

Property Rights

The rights to use, control, and obtain the benefits from a good or resource.

External Costs

Costs of a transaction or activity that affect parties who did not choose to incur that cost, often not reflected in the market price.

Social Cost

The total cost to society as a whole, including both private costs incurred by firms or individuals and external costs imposed on others.