ECONOMICS
PRICE CEILINGS AND FLOORS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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5$
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6$
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9$
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15$
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Detailed explanation-1: -A price ceiling pushes the price of a good down; fewer sellers will want to sell. A price floor pushes the price of a good up; fewer buyers will want to buy. A quota, by definition, reduces sales.
Detailed explanation-2: -Price ceilings prevent a price from rising above a certain level. When a price ceiling is set below the equilibrium price, quantity demanded will exceed quantity supplied, and excess demand or shortages will result.
Detailed explanation-3: -If a quota is set above the equilibrium quantity, there will be:-no effect.
Detailed explanation-4: -Price ceiling are used by the government to Prevent prices from being too high. The main reason for imposing price ceilings is to protect the interests of the consumers in situations in which they are not able to afford needed commodities.