A binding price ceiling (i) causes a surplus. (ii) causes a shortage. (iii) is set at a price above the equilibrium price. (iv) is set at a price below the equilibrium price

Since the Red Cross supplies 95 percent of the blood in the United States, it can be considered a monopolist. Assume that it, in fact, operates like a monopolist. The Red Cross currently charges hospitals and other users $21 for a pint of blood. In order to increase the supply of blood, the government offers the Red Cross a $10 million, lump-sum subsidy. How much more blood supply will the

subsidy generate? a. about 500,000 pints b. somewhere between 100,000 and 500,000 . depending on demand elasticity c. somewhere between 100,000 and 500,000 . depending on the elasticity of supply d. zero

Negative externalities cause loss of welfare not transmitted by market factors.

A. True B. False C. Uncertain