Asked by
Dulce Campos
on Dec 11, 2024
Verified
Figure 4-14 depicts the milk market. The horizontal line, P, represents a price ceiling imposed by the government. Which of the following is true?
A) In equilibrium, the quantity demanded is 800 gallons.
B) At the ceiling price, there is a surplus.
C) The quantity demanded at the price ceiling will equal the quantity supplied.
D) The equilibrium price would be $1 per unit without the price ceiling.
E) The quantity sold will be 500 gallons.
Price Ceiling
A legally imposed limit on how high a price can be charged for a product, service, or commodity.
Equilibrium
A state in which market supply and demand balance each other, and as a result, prices become stable.
Quantity Demanded
The total amount of a good or service that consumers are willing to buy at a given price over a specified period.
- Recognize the effects that price ceilings and floors exert on the equilibrium within markets.
Verified Answer
FH
Learning Objectives
- Recognize the effects that price ceilings and floors exert on the equilibrium within markets.