Asked by brent ashley on May 07, 2024
Verified
What the competition charges and what consumers are willing to pay sets the price ______ while costs of producing the product establish the price ______.
A) ceiling; floor
B) floor; ceiling
C) demand curve; supply curve
D) fixed costs; variable costs
Price Ceiling
A government-imposed limit on the price charged for a product, to ensure that it remains affordable for consumers.
Price Floor
A minimum price set by the government or an organization for a particular good or service, below which it cannot be sold.
Demand Curve
A graphical representation showing the relationship between the price of a good or service and the quantity demanded for a given period, with price on the vertical axis and quantity on the horizontal axis.
- Understand the role of competition and consumer willingness in setting prices.
Verified Answer
Learning Objectives
- Understand the role of competition and consumer willingness in setting prices.
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