If the Equilibrium Price of Aspirins Is $2

question 117

Multiple Choice

If the equilibrium price of aspirins is $2.50 and a price ceiling is imposed at $3.00, the eventual result after market adjustment will be a(n) :

• A) surplus.
• B) shortage.
• C) accumulation of inventories.
• D) equilibrium.

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Definitions:

Profitable

A financial state where revenues exceed expenses, leading to a positive net income.

Binding Price Floor

A minimum price set by the government or regulatory body that is above the equilibrium price, causing a surplus in the market.

Wheat Market

A sector of the commodities market that deals with the trading of wheat products and its derivatives.

Price Paid

The sum of currency traded in return for a product or service.