What is a government-imposed maximum price at which a good can be sold? a. a price support b. a price equilibrium c. a price floor d. a price ceiling
Added by Prabhjot S.
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Step 1: A government-imposed maximum price at which a good can be sold is called a price ceiling. Show more…
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A price ceiling is a legal maximum on the price at which a good can be sold. often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price ceiling. All of the above are correct.
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A price floor means that: inflation is severe in this particular market. sellers are artificially restricting supply to raise price. government is imposing a maximum legal price that is typically below the equilibrium price. government is imposing a minimum legal price that is typically above the equilibrium price.
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Consider a market with an equilibrium price of $10. If the government imposes a price ceiling of $8, other things equal, the result will be as follow: A shortage will occur because the price ceiling is below the equilibrium price. A surplus will occur because the price ceiling is below the equilibrium price. The price ceiling will not affect the market which will remain at equilibrium. A surplus will occur because the price ceiling is above the equilibrium price.
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