-Refer to the Above Figure

question 116

Multiple Choice

-Refer to the above figure. Other things being equal, when the government imposes a price floor at P2, then we would expect

• A) the quantity demanded is Q2.
• B) a surplus will occur.
• C) price to decline until an equilibrium is achieved at P0.
• D) consumers to bid against each other for goods and force the price even higher.

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Definitions:

Private Companies

Private companies are businesses owned by individuals or groups that do not trade their stock publicly on stock exchanges.

Public Companies

Companies whose shares are traded publicly on stock exchanges, allowing for wider ownership by investors.

Violated

Breached or transgressed, referring to a situation where laws, rules, or agreements are not followed.

Deregulation

The process of removing government restrictions and regulations in a sector to allow for more competition and efficiency in the market.