Asked by
Jesus Victor Ponce
on Dec 11, 2024
Verified
Both price floors and price ceilings lead to
A) shortages.
B) surpluses.
C) reductions in quality.
D) a reduction in the quantity traded.
Price Floors
Minimum price levels set by the government for certain goods and services, below which they cannot be sold.
Price Ceilings
A government-imposed limit on how high a price can be charged for a product or service.
Quantity Traded
The total number of units of goods or services exchanged in a market during a given period.
- Understand the consequences of price floors and ceilings on market equilibrium and their tendency to produce surpluses or shortages.
Verified Answer
AM
Learning Objectives
- Understand the consequences of price floors and ceilings on market equilibrium and their tendency to produce surpluses or shortages.