If an Effective Price Floor Is Imposed

question 72

Multiple Choice

If an effective price floor is imposed,

• A) a shortage occurs.
• B) equilibrium occurs.
• C) a surplus occurs.
• D) both a shortage and a surplus occur.
• E) scarcity occurs.

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Definitions:

Marginal Revenue Curve

A graphical representation showing how marginal revenue varies with changes in the quantity of goods sold, typically derived from the demand curve.

Price Increase

A rise in the cost of goods or services, which may reduce consumer purchasing power and lead to decreased demand.

Cartels

Groups of independent market participants who collude to control prices and output in a market, often to maximize joint profits.

Antitrust Laws

Regulations that promote competition by prohibiting monopolies, monopolistic practices, and other unfair business tactics that reduce consumer choice.