In a Competitive Market,a Price Ceiling Set Below the Free-Market

question 55

Multiple Choice

In a competitive market,a price ceiling set below the free-market equilibrium price will result in

• A)a continuation of the free-market equilibrium price and quantity.
• B)the quantity demanded exceeding quantity supplied and thus a shortage in the market.
• C)the quantity supplied exceeding quantity demanded and thus a surplus in the market.
• D)a new free-market equilibrium at a lower price and higher output level.
• E)excess supply.

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Definitions:

General Storage Closet

A space or room used for storing a wide range of items or supplies in a residential or commercial setting, typically not specialized for any specific type of goods.

Purchasing Groups

Groups of medical offices associated with a nearby hospital that order supplies through the hospital to obtain a quantity discount.

Quantity Discounts

Price reductions given to customers who purchase goods in large volumes, aimed at incentivizing bulk purchases and increasing sales volume.

Medical Practices

Professional behaviors and procedures followed by healthcare providers to deliver patient care.