4. If a binding price ceiling is imposed in a market, then the price ceiling is (A) above the equilibrium price, and there will be a surplus in the market. (B) below the equilibrium price, and there will be a surplus in the market. (C) above the equilibrium price, and there will be a shortage in the market. (D) below the equilibrium price, and there will be a shortage in the market.

1. When the local used bookstore prices economics books at $20.00 each, they generally sell 70 per month. If they lower the price to $8.00 each, they sell 90. Hence, the elasticity of demand for these economics books is (A) 3.43, so this store should lower price to raise total revenue. (B) 3.43, so this store should raise price to raise total revenue. (C) 0.29, so this store should lower price to raise total revenue. (D) 0.29, so this store should raise price to raise total revenue.

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