-Refer to the Above Figure

question 260

Multiple Choice

-Refer to the above figure. A price ceiling has been set at P₁, and a black market has opened. The equilibrium black market quantity will be

• A)below Q₁.
• B)above Q₃.
• C)between Q₁ and Q₃.
• D)Q₂.

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Definitions:

Normal Good

A good for which demand increases as the income of consumers increases.

Price Elasticity

measures how much the quantity demanded of a good responds to a change in the price of that good.

Elastic

Refers to a situation where the demand or supply for a product or service significantly changes in response to price changes.

Coefficient

In algebraic expressions, it's the numerical or fixed quantity that comes before and multiplies the variable.