Consider a Competitive Market for Good X

question 31

Multiple Choice

Consider a competitive market for good X.A binding price floor and a binding price ceiling in this market would be similar to each other in that

• A)each type of price control will lead to a reduction in deadweight loss and therefore an increase in efficiency in the market for good X.
• B)the units of good X that will no longer be produced or consumed will not generate any economic surplus.
• C)each type of price control results in a higher price paid by consumers,and therefore to a reduction in economic surplus.
• D)each type of price control results in a lower price received by sellers,and therefore to a reduction in economic surplus.
• E)additional units of good X will be produced and consumed,leading to an increase in economic surplus.

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