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Suppose Lewis lives in a community with no price controls. What would he expect will happen if his town borders a community where there is a binding price floor on most products? Prices in the legal market in the community with a binding price floor will fal. O There will be surpluses in the community with a binding price floor. More consumers will purchase the product in the community with the price floor. O The black market in his community will be larger than the black market in the community with the binding nrice floor

Suppose Lewis lives in a community with no price controls. What would he expect will happen if his town borders a community where there is a binding price floor on most products? Prices in the legal market in the community with a binding price floor will fal. O There will be surpluses in the community with a binding price floor. More consumers will purchase the product in the community with the price floor. O The black market in his community will be larger than the black market in the community with the binding nrice floor

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
Section: Chapter Questions
Problem 3CQQ
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Question 29 Suppose Lewis lives in a community with no price controls. What would he expect will happen if his town borders a community where there is a binding price floor on most products? Prices in the legal market in the community with a binding price floor will fal. O There will be surpluses in the community with a binding price floor. O More consumers will purchase the product in the community with the price floor. The black market in his community will be larger than the black market in the community with the binding price floor. O Prices in the legal market in the community with a binding price floor will rise.
Transcribed Image Text:Question 29 Suppose Lewis lives in a community with no price controls. What would he expect will happen if his town borders a community where there is a binding price floor on most products? Prices in the legal market in the community with a binding price floor will fal. O There will be surpluses in the community with a binding price floor. O More consumers will purchase the product in the community with the price floor. The black market in his community will be larger than the black market in the community with the binding price floor. O Prices in the legal market in the community with a binding price floor will rise.
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