If the Market Price of Coffee Is $3

question 132

Multiple Choice

If the market price of coffee is $3.00 per pound but the government will not allow coffee growers to charge more than $2.00 per pound of coffee, which of the following will happen?

• A) Demand must eventually decrease so that the market will come into equilibrium at a price of $2.50.
• B) There will be a shortage of coffee.
• C) Supply must eventually increase so that the market will come into equilibrium at a price of $2.50.
• D) The market will be in equilibrium at a price of $2.00.

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