Asked by
Olivia Zierenberg
on Dec 11, 2024
Verified
A price ceiling set below an equilibrium price tends to cause persistent imbalances in the market because
A) Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage.
B) Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus.
C) Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage.
D) Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.
Price Ceiling
A cap set by authorities on the maximum price that can be charged for a good or service, aimed at safeguarding the interests of consumers.
Equilibrium Price
The rate at which the demand for a good or service is equal to the supply, achieving a state of market equilibrium.
Market Imbalances
Situations where the quantity of a good or service supplied does not equal the quantity demanded, leading to surplus or shortage.
- Identify the effects that governmental measures such as price regulations and taxes have on market results.
Verified Answer
BS
Learning Objectives
- Identify the effects that governmental measures such as price regulations and taxes have on market results.