Consider the Market for Iron Ore,an Important Industrial Input

question 101

Multiple Choice

Consider the market for iron ore,an important industrial input.Suppose the government sets a price floor below the free-market equilibrium price.The result will be

• A)a continuation of the free-market equilibrium price and quantity.
• B)the quantity demanded will exceed quantity supplied and there will be a shortage in the market.
• C)the quantity supplied will exceed quantity demanded and there will be a surplus in the market.
• D)a new free-market equilibrium at a lower price and higher output level.
• E)increased government revenue.

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