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Refer to the Accompanying Figure

Question 137

Multiple Choice

Refer to the accompanying figure. Suppose all the sellers in this market started out charging a price of $45 per unit. What is the most likely result? Refer to the accompanying figure. Suppose all the sellers in this market started out charging a price of $45 per unit. What is the most likely result? A) They would all make a large profit because $45 is more than the equilibrium price. B) They would all just break even because $45 is their reservation price. C) They would lower their prices because at $45 there would be excess supply. D) They would lower their prices because at $45 there would be excess demand.


A) They would all make a large profit because $45 is more than the equilibrium price.
B) They would all just break even because $45 is their reservation price.
C) They would lower their prices because at $45 there would be excess supply.
D) They would lower their prices because at $45 there would be excess demand.

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