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In Some Recent Past Years, Prices of Basic Food Commodities

Question 80

Multiple Choice

In some recent past years, prices of basic food commodities such as corn, rice, and wheat have increased sharply. Chinese authorities were concerned that escalating prices would cause inflation and be followed by civil unrest.
-If the Chinese government sets a price ceiling below the equilibrium price, the result will be to


A) increase total surplus.
B) create deadweight loss.
C) increase surplus and create deadweight loss.
D) eliminate deadweight loss.

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