If a Price Floor Is Set Below the Current Market

question 218

Multiple Choice

If a price floor is set below the current market clearing price, then

• A) a surplus must immediately occur.
• B) a shortage must immediately occur.
• C) there will be incentives for black markets to develop.
• D) quantity demanded will remain equal to quantity supplied at the current market clearing price.

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Definitions:

Extensive Decision Making

A complex process involving significant research and evaluation, typically associated with high-value or infrequent purchases.

Buying Decision

The process by which a consumer identifies a need or desire, gathers information, evaluates choices, and finally selects a product or service.

Decision-making Process

A structured approach to making choices by gathering information, identifying alternatives, weighing options, and choosing a course of action.

Dissonance

A state of mental conflict or unease resulting from holding contradictory beliefs or attitudes.