Suppose a Market Is in Equilibrium and Then a Price

question 16

Multiple Choice

Suppose a market is in equilibrium and then a price ceiling is established below the equilibrium price.Which of the following best describes what will happen in this market?  

• A) Quantity demanded will decrease. 
• B) A surplus will develop. 
• C) A shortage will develop. 
• D) The market will remain in equilibrium.

Explain the principle of diminishing marginal utility.

Apply the concept of marginal utility in consumer decision-making and utility maximization.

Determine the utility-maximizing combination of products within a budget constraint.

Explain the relationship between marginal utility and total utility.

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