If a Shortage Exists for a Good in a Free-Market

question 176

Multiple Choice

If a shortage exists for a good in a free-market economy, the

• A) price of the good will rise.
• B) price of the good will fall.
• C) government will order suppliers to increase the production of that good.
• D) government must establish a rationing system to make sure that the good is fairly distributed.

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Definitions:

Market Share

Market share is the portion of a market controlled by a particular company or product, often expressed as a percentage of total sales in that market.

Sherman Act

A foundational antitrust law in the United States that prohibits monopolistic practices and cartels, aiming to preserve fair competition.

Contracts

Legally binding agreements between two or more parties that create mutual obligations.

Sherman Act

The Sherman Act is a landmark federal statute in the field of U.S. antitrust law passed by Congress in 1890, which prohibits monopolistic business practices and promotes competition.