The Imposition of a Binding Price Ceiling on a Market

question 136

Multiple Choice

The imposition of a binding price ceiling on a market causes quantity demanded to be

• A)​greater than quantity supplied.
• B)​less than quantity supplied.
• C)​equal to quantity supplied.
• D)​Both (a) and (b) are possible.

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Definitions:

Fallacy of Composition

Erroneous view that what is true for the individual (or the part) will also be true for the group (or the whole).

Association

An organization or group of individuals who voluntarily come together to achieve common goals, often representing a profession, industry, or interest.

Causation

The relationship between cause and effect where one event or action directly leads to another event or action as a result.

Macroeconomics

The branch of economics dealing with the structure, performance, behavior, and decision-making of an economy as a whole, rather than individual markets.