Study guide

When demand increases what happens to the price and quantity

• both increase

• both decrease

• price increases

• quantity increases

When supply increases what happens to the price and quantity

• price increases

• price decreases

• quantity increases

• quantity decreases

Price and quantity have an ___ relationship, when price rises , quantity demanded Falls

Price and Quantity Supplied have a ___ relationship, when price rises QS rises

A price floor will always create inefficiency and

• Surplus

• shortage

A price ceiling will always create inefficiency and

• surplus

• shortage

surplus is

• when you cant sell enough

• you cant make enough

Who does the government protect with a price floor

• buyers

• suppliers

• dogs

• cats

who does the government protect with a price ceiling

• cats

• suppliers

• consumers

• dogs

when a price ceiling is used is qd or qs larger

• QD

• QS