-In the Graph Shown Above,if the Government Set a Price

question 44

Multiple Choice

-In the graph shown above,if the government set a price ceiling of $45

• A)there would be a surplus.
• B)there would be a shortage.
• C)there would be no effect as buyers and sellers already agree on equilibrium price and quantity.
• D)there would be a temporary surplus,then price would fall to equilibrium price.

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Definitions:

Long-Run Equilibriums

A state in a market where all firms are making zero economic profit, and no new firms enter or exit the industry, resulting in a stable market condition over time.

Interdependent Firms

Businesses whose decisions and performance affect and are affected by the decisions and performance of other firms within the market.

Identical Products

Goods that are exactly the same in every characteristic, quality, and performance, with no differentiation.

Wasteful Duplication

The unnecessary repetition of tasks or production, often leading to inefficiency and increased costs.