5. Consumer and Producer Surplus; Price Ceilings and Floors
Price Ceilings, Price Floors, and Black Markets
Multiple Choice
Multiple ChoiceWhich of the following statements regarding the expected effects of a price control imposed on a competitive market is false?
A
A price floor above the competitive equilibrium price will result in a surplus.
B
A price ceiling above the competitive equilibrium price will result in a surplus.
C
A price ceiling below the competitive equilibrium price will result in a shortage.
D
A nonbinding price floor will result in a quantity exchanged that is equal to the equilibrium quantity
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