Exhibit 4-10  Supply and Demand Data for Apricots in Exhibit

question 233

Multiple Choice

Exhibit 4-10  Supply and demand data for apricots In Exhibit 4-10, assume that the government initially sets a price floor of $4 for apricots, and then removes the $4 price floor. What effect will this price change have?

• A) The price of apricots will rise.
• B) The quantity of apricots demanded will fall.
• C) The quantity of apricots supplied will decline.
• D) Quantity supplied will continue to exceed quantity demanded.

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Definitions:

Monopoly Power

The exclusive control by one company over an entire industry or sector, allowing the company to manipulate market prices and conditions.

Antitrust Laws

Regulations established to encourage competition by limiting monopolies, price fixing, and other practices detrimental to free market economics.

Herfindahl Index

The Herfindahl Index is a measure of market concentration, calculated by summing the squares of the market shares of all firms in the industry.

Clayton Act

A U.S. antitrust law passed in 1914, aimed at promoting competition and preventing monopolies by prohibiting certain actions that could lead to anti-competitive practices.