Asked by Faiyaz Fazil on Sep 23, 2024
Verified
Price ceilings cause
A) Some suppliers to drop out of the market
B) A decrease in the total production in the market
C) The creation of black markets
D) All the above
Price Ceilings
a government-imposed limit on how high a price can be charged for a product, service, or commodity.
Black Markets
Unauthorized or illegal trading of goods and services that violate government regulations.
Suppliers
Businesses or individuals that provide goods or services to another entity in a supply chain.
- Comprehend the impact of price regulations (ceilings and floors) on the economy.
- Attain knowledge on how wealth is either accumulated or depleted through distinct economic endeavors and legislations.
Verified Answer
TT
TRINDA TAYLOR2 days ago
Final Answer :
D
Explanation :
Price ceilings force suppliers to sell their goods below the market equilibrium price, making their business less profitable. Some suppliers may choose to drop out of the market to avoid losses. The decrease in the total production of goods is a result of suppliers being forced to produce fewer goods due to the price ceiling. Black markets emerge when products are sold at prices higher than the price ceiling. Therefore, all these factors happen when price ceilings are imposed.
Learning Objectives
- Comprehend the impact of price regulations (ceilings and floors) on the economy.
- Attain knowledge on how wealth is either accumulated or depleted through distinct economic endeavors and legislations.