When Prices of Products Are Set Below Equilibrium

question 130

Multiple Choice

When prices of products are set below equilibrium,

• A) society's resources are inefficiently allocated.
• B) firms expand output to increase profits.
• C) firms earn excessively high profits.
• D) consumers benefit from surpluses of cheap goods.

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Definitions:

Seine River

A historic river that flows through the heart of Paris, France, and is known for its cultural and economic significance.

Right Bank

Typically refers to the right side of a river when facing downstream, but without context, it lacks specificity for a clear financial definition.

Fixed-Income Securities

These are investment types that pay regular (often fixed) interest or dividend payments until maturity, at which point the principal is repaid.

Fixed Stream

A term generally relating to a constant or unchanging flow of income, payments, or data over a period of time.