Figure 4-17 Refer to Figure 4-17. Suppose a Price Floor of $7.00

Multiple Choice

Figure 4-17
Refer to Figure 4-17. Suppose a price floor of $7.00 is imposed. As a result,

A) buyers' total expenditure on the good decreases by $20.00.
B) the supply curve will shift to the left so as to now pass through the point (Q = 40, P = $7.00) .
C) the quantity of the good demanded decreases by 20 units.
D) the price of the good continues to serve as the rationing mechanism.