Which of the following best describes a price ceiling? The minimum price the producer is allowed to charge for a product The maximum price that the producer is allowed to charge for a product. The equilibrium price that a producer is allowed to charge for a product

Which of the following best describes a price ceiling? The minimum price the producer is allowed to charge for a product The maximum price that the producer is allowed to charge for a product. The equilibrium price that a producer is allowed to charge for a product

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter4: Markets In Action

Section: Chapter Questions

Problem 3SQ

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Question

Which of the following best describes a price ceiling?

The minimum price the producer is allowed to charge for a product

The maximum price that the producer is allowed to charge for a product.

The equilibrium price that a producer is allowed to charge for a product

Video Definition Video Definition Government regulation setting a maximum price a business may charge for a given good or service. A price ceiling itself does not cause demand or supply to change. It is simply a mechanism used to set a price that can be legally charged in the market. Price ceilings are often implemented during times of crisis to avoid price gouging.

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The maximum price that is set by the government for a particular commodity and services is called price ceilings.

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