Which of the Following Will Tend to Occur If Price

question 56

Multiple Choice

Which of the following will tend to occur if price floors are imposed on a product?

• A)persistent surpluses 
• B)problems of disposal of goods 
• C)disguised discounts developing to eliminate excess production 
• D)overinvestment in the industry 
• E)All of the above are correct.

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Definitions:

Patents

Legal documents granting an inventor exclusive rights to manufacture, use, or sell an invention for a certain number of years.

Cournot Model

Oligopoly model in which firms produce a homogeneous good, each firm treats the output of its competitors as fixed, and all firms decide simultaneously how much to produce.

Output

Represents the quantity of goods or services produced within a given period by a firm, industry, or economy.

Competitor

An entity operating in the same industry or market as another, offering similar products or services.