Suppose the Equilibrium Price of Bread Is $2 Per Loaf

question 35

Multiple Choice

Suppose the equilibrium price of bread is $2 per loaf. What would be the efficiency implications of a government policy that prevents the price of bread from rising above $1?

• A) The outcome would be inefficient since the marginal cost of producing bread is less than the marginal benefit to the consumers.
• B) The outcome would be inefficient since the marginal benefit to consumers is less than the marginal cost of producing the bread.
• C) The outcome would be efficient since the total benefit from consumption would be equal to the total cost of producing bread.
• D) The outcome would be efficient since the total net benefits would be maximized.
• E) The outcome will be efficient since the policy lowers the price of an essential item for consumers.

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Definitions:

EOF-controlled

EOF-controlled loops continue to execute until the End of File (EOF) is reached, typically used in file reading operations to process each element until the file ends.

Counter-controlled

Relates to loops or iterations that are controlled or managed by a counter variable which dictates the number of times the loop will execute.

For Loop

A control flow statement that repeats a block of code a certain number of times, based on a given condition.

Executes

Refers to the process where a computer or program carries out the instructions in a command or script.