Refer to the Accompanying Figure, Which Shows Both Short-Run and Long-Run

question 95

Multiple Choice

Refer to the accompanying figure, which shows both short-run and long-run demand and supply curves. If there is a $4 binding price ceiling imposed on a pharmaceutical drug, what will be the amount of the disequilibrium in the short run?

• A) There will be a shortage of 1,500,000 units.
• B) There will be a shortage of 800,000 units.
• C) There will not be a shortage; there will be a surplus.
• D) There will be a shortage of 2,000,000 units.
• E) There will be a shortage of 500,000 units.

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Definitions:

Legal Factors

Elements within the regulatory environment that affect businesses, including laws, regulations, and legal systems.

Nonprofit Firms

Organizations that operate for purposes other than making a profit, often focusing on social, charitable, or community-oriented goals.

Charitable Giving

Charitable giving is the act of donating money, goods, or time to non-profit organizations or causes, often as a way to support societal, environmental, or cultural issues.

Economic Factors

The external financial conditions and trends that influence a business's operations, such as inflation, employment levels, economic growth, and exchange rates.