A price support may be pictured by
A) shifting the demand curve to the right by the amount of the government purchase.
B) shifting the demand curve to the left by the amount of the government purchase.
C) shifting the supply curve to the right by the amount of the government purchase.
D) shifting the supply curve to the left by the amount of the government purchase.
E) drawing a horizontal line below equilibrium price at the supported price.
A
You might also like to view...
Which of the following is a prominent solution to adverse selection in used-car markets?
A) An imposition of a tax on the sale of each unit in the used-car market B) The imposition of a price ceiling in the used-car market C) The imposition of a price floor in the used-car market D) Third-party certification of used cars
The market supply function is P = 10 + Q and the market demand function is P = 70 - 2Q. What is the change in consumer surplus associated with a minimum floor price of $40?
A) -$25 B) -$150 C) -$175 D) -$200