Which of the Following Changes to the Market in the Graph

question 35

Multiple Choice

Which of the following changes to the market in the graph shown could cause the price ceiling to become non-binding?

• A) Demand could increase, and shift to the right.
• B) Supply could increase, and shift to the left.
• C) Supply could increase, and shift to the right.
• D) Supply could decrease, and shift to the left.

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Definitions:

Dutch Auction

A market structure where the price of an item is lowered until it meets a bid, opposite of the traditional auction format where prices ascend.

Second-Highest Willingness

The concept of determining the price or value of an item based on the highest bid that did not win in an auction or competitive bidding process.

Winner's Curse

A phenomenon in auctions, suggesting that the winning bidder tends to overpay due to incomplete information or overly optimistic value assessments.

Sealed-Bid Auction

A type of auction where all bidders simultaneously submit sealed bids to the auctioneer, and the highest bidder wins without knowing the bids of the others.