A price ceiling is ?
Correct answer: A. a maximum price usually set by government that sellers may charge for a good
- A. a maximum price usually set by government that sellers may charge for a good
- B. the different between the initial equilibrium price and the equilibrium price after a decrease in supply
- C. a minimum price usually set by government that sellers must charge for a good
- D. a minimum price that consumers are willing to pay for a good.
Explanation
A price ceiling is a legally imposed maximum price that sellers may charge. If it is set below equilibrium, it creates excess demand and may require non-price rationing.
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About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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