Asked by Johanna Lissette Veloz Segarra on Jul 05, 2024
Verified
(Figure: The Market for Spanish Textbooks) Use Figure: The Market for Spanish Textbooks.Suppose the government believes the producers of Spanish textbooks are not profitable,and it wants to make sure textbook producers are profitable.It could impose a control called a price _____,and for it to be binding,one possible price would be _____. 
A) floor;$90
B) floor;$40
C) ceiling;$40
D) ceiling;$90
Price Control
Government-imposed restrictions on the maximum prices that can be charged for goods and services to control inflation or protect consumers.
Spanish Textbooks
Educational books written in or translated into Spanish, specifically designed for learning the Spanish language or other subjects in Spanish-speaking regions.
Profitable
A financial state where revenues exceed expenses, leading to a positive net income.
- Develop insight into the notion of price floors and their impacts on equilibrium within the marketplace.
- Analyze the impact of government price supports in agricultural markets.
Verified Answer
ZK
Zybrea KnightJul 09, 2024
Final Answer :
A
Explanation :
If the government wants to ensure profitability for textbook producers, it would set a price floor above the current equilibrium price. In this case, a price floor of $90 would be binding because it is above the equilibrium price of $70 and would prevent the price from falling too low for producers to make a profit. Therefore, the correct choice is (A) floor; $90.
Learning Objectives
- Develop insight into the notion of price floors and their impacts on equilibrium within the marketplace.
- Analyze the impact of government price supports in agricultural markets.