Asked by Nguyen Hien Minh Quan on May 04, 2024
Verified
Refer to Figure 4.3. In the market for pencils, the quantity demanded will be greater than the quantity supplied if the government imposes an effective
A) price floor.
B) price ceiling.
C) market equilibrium price.
D) price surplus.
Price Floor
A minimum price below which exchange is not permitted.
Quantity Demanded
The amount of a good or service that consumers are willing and able to purchase at a given price over a specified period.
Government Imposes
Refers to regulations, taxes, or policies that a government enforces to influence economic or social outcomes.
- Scrutinize the outcome of price interventions, like ceilings and floors, on the harmony of market operations.
Verified Answer
NS
Nihal SinghMay 09, 2024
Final Answer :
B
Explanation :
A price ceiling set below the market equilibrium price will result in a quantity demanded that exceeds the quantity supplied, leading to a shortage.
Learning Objectives
- Scrutinize the outcome of price interventions, like ceilings and floors, on the harmony of market operations.