If a Binding Price Floor Were Placed in the Market

question 83

Multiple Choice

If a binding price floor were placed in the market in the graph shown:

• A) quantity demanded would exceed quantity supplied.
• B) quantity supplied would exceed quantity demanded.
• C) the demand curve would have to shift.
• D) the supply curve would have to shift.

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Definitions:

Groupthink

A psychological phenomenon that occurs within a group of people, where the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Risky Shift

Tendency for group discussion to produce group decisions that are more risky than the mean of members’ pre-discussion opinions, but only if the pre-discussion mean already favoured risk.

Pre-Discussion

A phase prior to formal discussions where initial opinions or subjects may be informally exchanged.

Groupthink

A psychological phenomenon where the desire for harmony and conformity in a group leads to irrational and dysfunctional decision-making outcomes.