If the Price Is Below the Equilibrium Price in the Market

question 49

Multiple Choice

If the price is below the equilibrium price in the market for grapefruit, assuming a positively sloped supply curve and a negatively sloped demand curve, total surplus:

• A) will increase.
• B) will decrease.
• C) will not change.
• D) may change, but we cannot determine the change without more information.

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Definitions:

Punitive Damages

Damages exceeding simple compensation and awarded to punish the defendant for egregious behavior or acts.

Tort Of Deceit

A civil wrong involving intentional misrepresentation, leading another to suffer damages.

Fraudulent Misrepresentation

A false statement made knowingly or recklessly to induce another party to enter into an agreement, leading to a misleading transaction.