When a Binding Price Ceiling Is Imposed on a Market

question 105

Multiple Choice

When a binding price ceiling is imposed on a market to benefit buyers,

• A)every buyer in the market benefits.
• B)every buyer and seller in the market benefits.
• C)every buyer who wants to buy the good will be able to do so,but only if he waits in long lines.
• D)some buyers will not be able to buy any amount of the good.

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Definitions:

Cournot Duopolists

Firms in a duopoly market structure who compete on the basis of quantity produced, as modeled by Antoine Cournot.

Demand Curve

A graph depicting the relationship between the quantity of a good that consumers are willing to buy and the price of the good.

Total Costs

The total of all expenses involved in creating goods or services, encompassing both fixed and variable costs.

Daily Profit

The financial gain or loss a business experiences on a daily basis, calculated as the difference between daily revenue and daily expenses.