Suppose the Current Equilibrium Price of Pizza Is $5

question 177

Multiple Choice

Suppose the current equilibrium price of pizza is $5.If the government decides the price of pizza cannot rise above $4, the result of this policy would be

• A)a shortage
• B)a surplus
• C)that the market would remain in equilibrium but with a larger quantity bought and sold than at $5
• D)at the $4 price, the quantity sold would be greater than the quantity bought
• E)a shift of demand to the right

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Definitions:

Low Power of Suppliers

A business situation where suppliers have little control over the pricing and terms of products being supplied, enhancing the bargaining power of the purchasing company.

Hypercompetition

An extremely competitive business environment characterized by rapid and constant changes in technology, customer preferences, and market dynamics.

Attractive Industry

A sector of the economy that offers significant opportunities for investment, growth, and profitability, making it appealing to businesses and investors.

Monopoly

A market structure characterized by a single seller, selling a unique product in the market with no close substitutes, often leading to less competition.