Asked by astrid truluck on May 12, 2024
Verified
A government-imposed maximum price will have no economic impact if
A) it is below the equilibrium price.
B) it is at or below the equilibrium price.
C) it is above the equilibrium price.
D) there is a fixed supply of the good.
Government-imposed Maximum Price
A legally set ceiling on the price at which a good or service can be sold, typically to protect consumers from excessively high prices.
Economic Impact
The effect of an event, policy, or market condition on the economy, which can be observed in changes to GDP, employment, or investment.
- Acquire knowledge on how alterations in price controls affect the levels of quantity demanded and supplied.
Verified Answer
CW
cristine wauthionMay 13, 2024
Final Answer :
C
Explanation :
A government-imposed maximum price above the equilibrium price will have no economic impact because the market price determined by supply and demand would naturally be lower than the imposed maximum, allowing the market to function without interference.
Learning Objectives
- Acquire knowledge on how alterations in price controls affect the levels of quantity demanded and supplied.