Suppose the Government Imposes a Price Support That Is Above

question 142

Multiple Choice

Suppose the government imposes a price support that is above the equilibrium price.As a result,

• A) total revenue increases.
• B) consumer surplus increases.
• C) the marginal cost of the last unit produced decreases.
• D) the government has effectively imposed a price ceiling.
• E) the subsidy the government pays decreases.

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Definitions:

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