When the Government Imposes an $8 Price Ceiling on a Good

question 12

Multiple Choice

When the government imposes an $8 price ceiling on a good that would have had a $10 equilibrium price without the ceiling,

• A) surpluses are created.
• B) supply will increase to meet the demand.
• C) excess demand occurs.
• D) quantity demanded of the good will fall.

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Definitions:

Private Enterprise

Businesses or economic activities that are owned and operated by private individuals or companies, not by the state or government entities.

Public Good

A product that one individual can consume without reducing its availability to another individual and from which no one is excluded.

Foreign Aid

Financial or material support given by one country to another, typically for economic, humanitarian, or developmental purposes.

GDP

Stands for Gross Domestic Product, the total value of all goods and services produced within a country's borders in a specific time period, serving as a broad measure of economic activity.