Suppose That a Market Is Initially in Equilibrium

question 28

Multiple Choice

Suppose that a market is initially in equilibrium.Then the government imposes a price floor above the equilibrium price.Which of the following will occur in the absence of a black market?

• A) The market will remain in equilibrium.
• B) The quantity sold will drop.
• C) The quantity demanded will increase.
• D) The quantity supplied will decrease.
• E) An excess demand will develop.

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Definitions:

Rapidly Rising Wages

A situation where the remuneration for employees increases at a fast pace within a short period.

Increased Job Creation

The process of generating more employment opportunities within an economy or a specific sector.

Competitive Advantage

The unique attributes or circumstances that allow an organization to outperform its competitors.

Tangible Assets

Refers to physical and material assets that an organization owns, such as buildings, machinery, and inventory.