Narrbegin Exhibit 4 Narrend
-In Exhibit 4

Narrbegin Exhibit 4.5 Supply and demand data for cars
$$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Cars demanded } \\\text { per manth }\end{array} & \begin{array} { c } \text { Price per } \\\text { car (\$) }\end{array} & \begin{array} { c } \text { Cars supplied } \\\text { per manth }\end{array} \\\hline 50 & 50 \text { 000 } & \text { 80 } \\\hline 55 & 40 \text { 000 } & 75 \\\hline 60 & 30000 & 70 \\\hline 65 & 20000 & 65 \\\hline 70 & 10000 & 55 \\\hline\end{array}$$ Narrend
-In Exhibit 4.5, assume that the government initially sets a price floor of $30 000 for cars, and then removes this price floor. What effect will this price change have?

A) The price of cars will rise.
B) The quantity of cars demanded will fall.
C) The quantity of cars supplied will decline.
D) Quantity supplied will continue to exceed quantity demanded.

Correct Answer:

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