If the Government Imposes a Maximum Price That Is Above

question 225

Multiple Choice

If the government imposes a maximum price that is above the equilibrium price,

• A)quantity demanded will be less than quantity supplied.
• B)demand will be greater than supply.
• C)this maximum price will have no economic impact.
• D)the available supply will have to be rationed with a non-price rationing mechanism.

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Definitions:

Principals

The main parties interested or engaged in a certain activity or operation, often used in a legal, educational, or business context.

Underpayment Inequity

A situation where an individual feels they receive less compensation compared to others for the same work.

Equity Theory

A concept in social psychology that assesses the fairness of an individual's situation by comparing their input and outcome ratio to those of others.

Input-Outcome Ratio

A concept in equity theory referring to the balance between an individual's contributions to and the rewards they receive from their work or relationship.