Every hour, the federal government spends about-

A shortage tends to put ________ pressure on the price of the product, which ________ the quantity demanded

A) upward; increases B) upward; decreases C) downward; increases D) downward; decreases

Price cap regulation is regulation that

A) is a marginal cost pricing rule. B) is an average cost pricing rule. C) imposes a price ceiling on the regulated firm. D) has the same incentive effects as does rate of return regulation. E) is the same as allowing the firm to operate as if it was totally unregulated.