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Suppose Cupcakes Are Currently Selling for $8 Per Dozen

Question 166

Multiple Choice

Suppose cupcakes are currently selling for $8 per dozen. The equilibrium price of cupcakes is $10 per dozen. What would we expect?


A) a shortage to exist and the market price of cupcakes to increase
B) a shortage to exist and the market price of cupcakes to decrease
C) a surplus to exist and the market price of cupcakes to increase
D) a surplus to exist and the market price of cupcakes to decrease

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