Which of the following statements best describes price ceilings?
a. A price ceiling that is set at a relatively high level is nonbinding.
b. A price ceiling that is set at a relatively low level is nonbinding.
c. A price ceiling that is set at a relatively high level will have no practical effect unless the equilibrium price falls below the price ceiling.
d. A price ceiling that is set at a relatively low level will have no practical effect unless the equilibrium price soars high enough to exceed the price ceiling.
a. A price ceiling that is set at a relatively high level is nonbinding.
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In a perfectly competitive market in the short run, as the market demand increases, the firms ________ their output and their economic profit ________
A) increase; increases B) increase; decreases C) decrease; decreases D) decrease; increases
Advertising is used by firms in a monopolistic competitive industry to
A) differentiate their product from those of competitors. B) increase brand loyalty. C) increase demands for their individual products. D) all of the above.