Which of the following is true if a Price Ceiling of $5 is imposed on this market? O A. An Economic Shortage of 20 units will exist. OB. An Economic Shortage of 40 units will exist. Shortage of 10 units will exist. OC. An Economic O D. An Economic Surplus of 20 units will exist. O E. An Economic Surplus of 30 units will exist

The point of equilibrium in the market is important because a. All of these. O b. A seller sells the product at equilibrium Price is fixed for a product at the equilibrium O d. A buyer purchases the product at equilibrium

If a quota reduces the amount of a good produced and consumed then we will see OA. that the competitive market equilibrium is achieved. OB. a deadweight loss. OC. excess supply in the market. O D. that economic surplus is maximized. E. lower prices in the market.

Figure 7-1 Demand A B D QUANTITY Refer to Figure 7-1. Suppose that the price falls from P2 to P1 Area B represents the O a. decrease in producer surplus in the market when the price increases from P1 to P2. b. decrease in producer surplus that results from a downward-sloping demand curve. Oc.consumer surplus to new consumers who enter the market. O d. additional consumer surplus to initial consumers when the price falls. PRICE