Asked by
Maria Morales- Martinez
on Oct 26, 2024
Verified
The market for apples is in equilibrium at a price of $0.50 per pound.If the government imposes a price ceiling in the market at $0.40 per pound:
A) quantity demanded will decrease.
B) quantity supplied will increase.
C) there will be a shortage of the good.
D) the price ceiling will not affect the market price or output.
Price Ceiling
A government-imposed limit on how high a price is charged for a product, commodity, or service.
Equilibrium Price
The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition.
- Appraise the impact of price ceilings on market operations and the welfare of consumers and producers, especially considering the result of shortages.
Verified Answer
SC
Learning Objectives
- Appraise the impact of price ceilings on market operations and the welfare of consumers and producers, especially considering the result of shortages.