TABLE 4-4 -Refer to Table 4-4. If the Government Intervenes in the Government

question 14

Multiple Choice

TABLE 4-4

-Refer to Table 4-4. If the government intervenes in the market for milk and sets a price ceiling of $0.90 per litre, what will be the result?

• A) Some sellers will not be able to sell available milk at that price.
• B) Some consumers will not be able to buy milk at that price.
• C) There will be a shortage of exactly 1200 litres of milk.
• D) There will be a surplus of exactly 1000 litres of milk.

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Definitions:

Profits

The difference between the revenue a company earns from selling its products or services and its total costs.

Price Discrimination

The strategy of selling the same product at different prices to different groups of buyers.

Oligopoly

A market structure characterized by a small number of firms that hold a significant market share, leading to limited competition.

Price Discrimination

A pricing strategy where a business charges different prices to different customers for the same product or service, based on what the seller believes the customer is willing to pay.