Asked by
Denzel Yakam
on Oct 09, 2024
Verified
A price ceiling means that:
A) there is currently a surplus of the relevant product.
B) government is imposing a legal price that is typically below the equilibrium price.
C) government wants to stop a deflationary spiral.
D) government is imposing a legal price that is typically above the equilibrium price.
Price Ceiling
A legally established maximum price for a good, or service. Normally set at a price below the equilibrium price.
Legal Price
A price set by law or regulation, typically to prevent prices from being too high or too low in a market.
Equilibrium Price
The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition.
- Understand the effects of governmental actions, including the implementation of price floors and ceilings, on the outcomes of markets.
Verified Answer
LW
Learning Objectives
- Understand the effects of governmental actions, including the implementation of price floors and ceilings, on the outcomes of markets.