Author Question: In a competitive market, a legal price ceiling set above the free-market equilibrium price will result in (Read 136 times)

Deej · **on:** Oct 12, 2022

Question 1

In a market where we observe a disequilibrium, quantity exchanged is determined by
◦ the quantity supplied.
◦ the quantity demanded.
◦ the greater of quantity demanded and quantity supplied.
◦ neither quantity demanded nor quantity supplied.
◦ the lesser of quantity demanded and quantity supplied.

Question 2

In a competitive market, a legal price ceiling set above the free-market equilibrium price will result in
◦ a new free-market equilibrium at a higher price and lower output level.
◦ a continuation of the free-market equilibrium price and quantity.
◦ the quantity demanded exceeding quantity supplied and thus a shortage in the market.
◦ the quantity supplied exceeding quantity demanded and thus a surplus in the market.
◦ increased profits to the firms in the industry.

mamboz · **Reply #1 on:** Oct 12, 2022

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