Suppose That the Equilibrium Price Is $20 and the Government

question 70

Multiple Choice

Suppose that the equilibrium price is $20 and the government sets the price floor at $30. The result of this price floor is:

• A) negligible.
• B) equilibrium.
• C) surplus.
• D) shortage.

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Definitions:

Oil

A fossil fuel that is a primary source of energy for heating, transportation, and the production of many goods, playing a critical role in the global economy.

Trade Deficit

A situation in which a country's imports of goods and services exceed its exports, indicating that it is buying more from other countries than it is selling to them.

Exports

Items or services transferred from one country to another for commerce or trading.

Imports

Goods and services brought into a country from abroad for sale.