A Shortage Results When

question 181

Multiple Choice

A shortage results when:

• A) a price floor is imposed.
• B) a price ceiling is imposed.
• C) there is excess supply without any price controls.
• D) a price floor is imposed but it is not binding.

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Definitions:

Break-even Point

The production level at which total revenues equal total expenses, and there is no profit or loss.

Short-run Supply Curve

A graphical representation in economics showing the relationship between the price level and the quantity of goods supplied over a short period, where some factors of production are fixed.

AVC Curve

The Average Variable Cost curve represents how the variable cost per unit of output changes with the quantity produced.

ATC Curve

The Average Total Cost curve, representing the per unit cost of production (fixed and variable costs combined) at different levels of output.