TYPE: M SECTION: 1 DIFFICULTY: 2 85.September 30, 2020
Question 1: Suppose that two firms produce differentiated products and compete in prices. As in class, the two firms are located at two ends of a…September 30, 2020
A binding price ceiling will result in:
excess demand for the good or service.
the market eventually returning to the equilibrium price and quantity.
excess supply of the good or service.
None of these is correct.
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