Suppose the government decides that a particular commodity is a luxury and decides to fix its price above the market-determined price. What implications could this policy have?
What will be an ideal response?
If the government fixes the price of a commodity above the market-determined price, it will provide an incentive to sellers to supply more. This will result in an excess supply of the commodity.
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The short-run aggregate supply curve is positively sloped because
A) real interest rates rather than nominal rates are used. B) no price adjustments take place in the short-run. C) complete price adjustments take place in the short-run. D) some price adjustments take place in the short-run.
A horizontal merger is one in which the merging firms:
a. are about the same size. b. produce the same good in the same industry. c. will control greater than 50 percent of the market. d. have never directly competed in the past. e. will pay twice as much in taxes.