If the price in a market is above its equilibrium level, there will be a:
A. shortage and upward pressure on price.
B. surplus and downward pressure on price.
C. surplus and upward pressure on price.
D. shortage and downward pressure on price.
Answer: B
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The demand equation for the Widget Company has been estimated to be:
Q = 20,000 + 10 I - 50P + 20 PC where Q = monthly number of widgets sold, I = average monthly income, P = price of widgets, and PC = average price of competing goods. a. If next month's income is forecast to be 2,000, the price of competing goods is forecast to be $20, and the price of widgets will be set at $30, forecast sales. b. What will sales be if the price is dropped to $20?
A quota is
A) a government-imposed restriction on the quantity of a specific good that can be imported into a country. B) a tariff imposed on goods that are dumped into the home country. C) a tariff imposed on goods that are subsidized by their domestic governments and exported to other countries. D) a tariff based on the value of the imported good.