Asked by paige raffo on Sep 23, 2024
Verified
Government can intervene in the market through
A) Price floors
B) Price ceilings
C) Taxes
D) All the above
Price Ceilings
Regulatory limits set on the price that can be charged for certain goods or services, intended to protect consumers from excessive rates.
Price Floors
A minimum price, set by law or agreement, below which a commodity cannot legally be sold, often used in agriculture to stabilize market prices.
Taxes
Compulsory financial charges imposed by a government on individuals, businesses, or transactions to fund public spending.
- Discover the influence of price setting mechanisms (ceilings and floors) in economic operations.
- Study the influence of government policies on market equilibrium, including aspects of taxation, price regulation, and the granting of subsidies.
Verified Answer
CM
Cornelius Monroe2 days ago
Final Answer :
D
Explanation :
All three methods of intervention - price floors, price ceilings, and taxes - can be used by the government to influence market outcomes. Price floors set a minimum price that must be paid for a good or service, while price ceilings set a maximum price that can be charged. Taxes can be used to discourage the production or consumption of a particular good or service, or to raise revenue for the government. Therefore, choice D is the correct answer.
Learning Objectives
- Discover the influence of price setting mechanisms (ceilings and floors) in economic operations.
- Study the influence of government policies on market equilibrium, including aspects of taxation, price regulation, and the granting of subsidies.