Exhibit 4.7 -Suppose a Price Floor for a Good Is Set Above

question 156

Multiple Choice

Exhibit 4.7

-Suppose a price floor for a good is set above the equilibrium price. At this price, it is likely that _____

• A) quantity supplied will be less than quantity demanded.
• B) quantity supplied will exceed quantity demanded.
• C) there will be a shortage of the good.
• D) a greater number of consumers will be willing and able to purchase the good.
• E) producers will suffer an economic loss.

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Definitions:

Price of Chicken

The cost at which chicken is sold, which can vary based on factors like market demand, feed prices, and production costs.

Demand for Beef

The desire of consumers to purchase beef at various price levels, holding other factors constant.

Prices of Inputs

The costs associated with the materials, labor, and other resources necessary for the production of goods or services.

Produce

To manufacture, grow, or create goods and services for consumption or sale.