Consider the production possibilities frontier in the figure shown. As more and more cigars are produced the opportunity cost of producing more cigars:

Referring to the previous question, what will happen to the equilibrium price and quantity of cars?

A) They will stay the same as domestic producers replace the cars once imported. B) The shortage will cause the equilibrium price to increase and equilibrium quantity will decrease. C) The surplus will cause equilibrium price to decrease and equilibrium quantity to increase. D) The shift in the demand curve will cause equilibrium price to increase and quantity to increase.

If a price ceiling is not binding, then a. there will be a surplus in the market

b. there will be a shortage in the market. c. the market will be less efficient than it would be without the price ceiling. d. there will be no effect on the market price or quantity sold.