Asked by Christian DelaRosa on Jun 27, 2024
Verified
The dictator of a small country restricts the price of cars to an amount less than or equal to $1,200 (a price below the equilibrium price for cars) .Such a policy would set a:
A) price floor.
B) price ceiling.
C) quota.
D) tariff.
Price Ceiling
A legally imposed maximum price on goods or services, intended to prevent prices from rising above a certain level.
Equilibrium Price
The market price where the quantity of goods supplied is equal to the quantity of goods demanded.
- Learn about the principles and effects of imposing price ceilings and floors in markets pertaining to goods and services.
Verified Answer
GM
Gabriela MonserratJul 02, 2024
Final Answer :
B
Explanation :
A price ceiling is a government-imposed limit on how high a price can be charged for a good or service. In this case, the dictator is restricting the price of cars to below the equilibrium price, creating a price ceiling.
Learning Objectives
- Learn about the principles and effects of imposing price ceilings and floors in markets pertaining to goods and services.
Related questions
(Table: Market for Apartments)Use Table: Market for Apartments ...
If the Government Sets Out to Help Low-Income People by ...
A Maximum Price Legislated by the Government Is Called ...
Suppose the Jamaican Government Sets Coffee Prices at $1 Per ...
A Price Ceiling Is Always a Binding Price Control, Whereas ...