Asked by
Cierstin Ellison
on Nov 17, 2024
Verified
Consider the U.S. market for chocolate, a market in which the government has imposed a nonbinding price ceiling. Which of the following events could convert the price ceiling from a nonbinding to a binding price ceiling?
A) A government study that shows that consuming chocolate increases the incidence of cancer.
B) A large increase in the size of the cocoa bean crop; cocoa beans are used to produce chocolate.
C) South American cocoa bean producers refuse to ship to chocolate producers in the United States.
D) A sharp drop in consumer income; chocolate is a normal good.
Price Ceiling
A legal maximum on the price at which a particular good can be sold.
Cocoa Bean
The dried and fully fermented seed from which cocoa solids and cocoa butter are extracted, essential in chocolate making.
Government Study
Research or investigation conducted by or on behalf of government agencies to inform policy decisions, evaluate programs, or gather statistical data.
- Comprehend the reasons for implementing and eliminating price regulations.
- Analyze the effects of alterations in supply and demand within various pricing regulations.
Verified Answer
TS
Learning Objectives
- Comprehend the reasons for implementing and eliminating price regulations.
- Analyze the effects of alterations in supply and demand within various pricing regulations.