If the Price Ceiling Is Set Above the Equilibrium Price

question 35

Multiple Choice

If the price ceiling is set above the equilibrium price,

• A) quantity demanded will equal quantity supplied.
• B) there will be a surplus.
• C) there will be a shortage.
• D) demand will be less than supply.

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Definitions:

Treasury Bills

Short-term debt obligations issued by the government to finance its operations, with maturities ranging from a few days to one year.

Mutual Mistake

A legal concept where both parties involved in an agreement have a misunderstanding regarding a critical fact of the agreement.

Reasonable Person Test

In a negligence action, the judicial standard of socially acceptable behavior; the standard used to determine the existence of apparent authority of an agent.

Meeting of the Minds

An agreement between parties on the terms of a contract, demonstrating mutual consent and understanding.