Asked by
Braylon Landry
on Oct 13, 2024
Verified
Price ceilings keep market price
A) above the equilibrium price and create surpluses.
B) above the equilibrium price and create shortages.
C) below the equilibrium price and create surpluses.
D) below the equilibrium price and create shortages.
Price Ceilings
A legal maximum price set below the equilibrium price for a good or service, aimed at preventing prices from becoming too high.
Equilibrium Price
The cost at which the amount of a product or service that consumers want to buy is equal to the amount that sellers want to sell, resulting in a balanced market.
Shortages
The situation where the demand for a product or service exceeds its supply in a market.
- Determine the effects of price regulations, including price ceilings and floors, on market surplus or deficit.
Verified Answer
GB
Learning Objectives
- Determine the effects of price regulations, including price ceilings and floors, on market surplus or deficit.