When Prices of Products Are Set Below Equilibrium

question 130

Multiple Choice

When prices of products are set below equilibrium,

• A) society's resources are inefficiently allocated.
• B) firms expand output to increase profits.
• C) firms earn excessively high profits.
• D) consumers benefit from surpluses of cheap goods.

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Definitions:

Organic Solidarity

A concept of social cohesion that arises when the people in a society are interdependent, but hold to varying interests and values.

Mechanical Solidarity

A form of social cohesion that arises in traditional societies from a shared culture, kinship, and beliefs, making society function as a cohesive unit.

Morality

Morality encompasses the differentiation of intentions, decisions, and actions between those that are distinguished as proper and those that are improper. It is often guided by cultural, religious, or philosophical principles.

Anomic Suicides

A concept in sociology referring to suicides that occur due to a breakdown in social bonds or norms, often in times of social or economic upheaval.