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Suppose the Government Imposes a Price Ceiling on Petrol That

Question 126

Multiple Choice

Suppose the government imposes a price ceiling on petrol that is less than the equilibrium price. As a result,


A) the price of petrol rises to the equilibrium price.
B) there is incentive for buyers to undertake search activity.
C) the demand for petrol will decrease and the demand curve will shift leftward.
D) the supply of petrol will increase and the supply curve will shift rightward.

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