Producers were accused of price gouging as the price of bottled water soared after Hurricane Andrew. Consumers clamored for price controls to keep bottled water at pre-Andrew levels. Use supply and demand analysis to graphically show the effect of
setting a price ceiling on bottled water after Hurricane Andrew at the pre-hurricane equilibrium price. Use your graph to assist in explaining the likely unintended effects of such a price control. Be sure that your graph is completely and correctly labeled.
Figure 4-25
Economics
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If a firm's output less than doubles when all inputs are doubled, production is said to occur under conditions of
A) increasing returns to scale. B) imperfect competition. C) intra-industry equilibrium. D) constant returns to scale E) decreasing returns to scale.
Which of the following is NOT a normative standard for income distribution?
A) the productivity standard B) the egalitarian principle C) rewarding people according to merit D) All of the above are normative standards.