Asked by Aditya Venkat on Jun 06, 2024
Verified
In a rental market like the one in the figure given below,a government-imposed rule that rent cannot exceed $750 per month is referred to as:
A) a trade barrier.
B) a quality control.
C) a price ceiling.
D) a price floor.
E) a subsidy.
Price Ceiling
A government-imposed limit on the maximum price that can be charged for a product or service.
Government-Imposed
pertains to regulations, restrictions, or conditions set by public authorities that affect individuals, businesses, or activities within a jurisdiction.
- Discern the effect of governmentally imposed price restrictions on the interplay between supply and demand.
Verified Answer
SC
Sarah CassemJun 12, 2024
Final Answer :
C
Explanation :
A government-imposed rule that sets a maximum price for rent, in this case, $750 per month, is referred to as a price ceiling. This is because it sets a maximum limit on the price that landlords can charge for rent. It is not a trade barrier, quality control, price floor, or subsidy as those are different economic concepts.
Learning Objectives
- Discern the effect of governmentally imposed price restrictions on the interplay between supply and demand.