Asked by
Kayla Fields
on Dec 11, 2024
Verified
Refer to Figure 4-17. Which of the following price controls would cause a shortage of 10 units of the good?
A) a price ceiling of $5.50
B) a price floor of $5.50
C) a price ceiling of $6.50
D) a price floor of $6.50
Price Ceiling
A government-imposed limit on how high a price is charged for a product or service.
Price Control
Government-imposed limits on the prices that can be charged for goods and services in the market, aimed at managing affordability and stabilizing the economy.
Shortage
A condition in which the amount of a good offered for sale by producers is less than the amount demanded by buyers at the existing price. An increase in price would eliminate the shortage.
- Learn about the influence of market interventions like price ceilings and floors on market outcomes.
- Understand the implications of price controls (ceilings and floors) on market shortages and surpluses.
Verified Answer
ML
Learning Objectives
- Learn about the influence of market interventions like price ceilings and floors on market outcomes.
- Understand the implications of price controls (ceilings and floors) on market shortages and surpluses.