When Prices of Products Are Set Below Equilibrium

question 130

Multiple Choice

When prices of products are set below equilibrium,

• A) society's resources are inefficiently allocated.
• B) firms expand output to increase profits.
• C) firms earn excessively high profits.
• D) consumers benefit from surpluses of cheap goods.

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Definitions:

Crocodilians

A group of large aquatic reptiles, including alligators, crocodiles, caimans, and gharials.

Modern Reptiles

Current existing species of the class Reptilia, including snakes, lizards, turtles, crocodiles, and alligators, which are cold-blooded and lay eggs.

Hominin Species

Members of the taxonomic group that includes modern humans and all their ancestors, recognized by bipedalism and larger brain sizes relative to body.

Upright Vertebral Column

A characteristic feature of vertebrates including humans, enabling an upright posture and supporting the body's weight.