Question

price floor amd price ceilings leads

price floor amd price ceilings leads

Homework Answers

Answer #1

Price floor is setting the minimum price of a good above the equilibrium price which makes the good costly as a result of which the quantity supplied is more than the quantity demanded at that price which leads to surplus in the market.

On the other hand, price ceiling refers to fixing the maximum price of a product below the equilibrium price when the equilibrium price is very high in the market in order to protect the interest of consumers. So, the quantity demanded is more than the quantity supplied at this price which leads to a shortage in the market.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Define price ceiling and price floor and give an example of each. Which leads to a...
Define price ceiling and price floor and give an example of each. Which leads to a shortage? Which leads to a surplus? Why?
Define price ceiling and price floor and give an example of each. Which leads to a...
Define price ceiling and price floor and give an example of each. Which leads to a shortage? Which leads to a surplus? Why? 400 words min
Define price ceiling and price floor and give an example of each. Which leads to a...
Define price ceiling and price floor and give an example of each. Which leads to a shortage? Which leads to a surplus? Why? 400 Words min.
“Price ceilings prevent a price from rising above a certain level. When a price ceiling is...
“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. Price floors prevent a price from falling below a certain level. When a price floor is set above the equilibrium price, quantity supplied will exceed quantity demanded, and excess supply or surpluses will result. Price floors and price ceilings often lead to unintended consequences.” In this...
true or false: 1. Agricultural price supports are a price floor that has little to no...
true or false: 1. Agricultural price supports are a price floor that has little to no cost to consumers. 2. Say that equilibrium price is $10. “A price floor of $12 will be binding (i.e. have an impact on the price consumers pay)." 3. With linear supply and demand curves and in the absence of price ceilings/floors, consumer and producer surplus will be triangles. Thus the formula for the area of a triangle (1/2 x base x height) is useful...
Which of the following statements about price ceilings is TRUE? (Assume the price ceiling is set...
Which of the following statements about price ceilings is TRUE? (Assume the price ceiling is set below the unregulated equilibrium price.) Group of answer choices A) Price ceilings make sellers worse off. B) Price ceilings make buyers better off. C) Both a) and b) are true. D) Neither a) nor b is true).
be original and use your own words Define price ceiling and price floor and give an...
be original and use your own words Define price ceiling and price floor and give an example of each. Which leads to a shortage? Which leads to a surplus? Why? add reference
6. A binding price floor government policy leads to excess demand, which is more inefficient than...
6. A binding price floor government policy leads to excess demand, which is more inefficient than market discipline. ( ) 7. Whoever is willing and able to pay the price gets scarce resources in a market economy. ( ) 8. A decrease in supply will cause the largest increase in price when demand is very inelastic. ( ) 9. If the government removes a tax on a good, then the price paid by buyers and the price received by sellers...
Explain the difference between price ceilings and price floors. What are the unintended consequences that are...
Explain the difference between price ceilings and price floors. What are the unintended consequences that are created because of this government intervention?
I buy three CALL options on AMD with a strike price of $32.50.The option premium is...
I buy three CALL options on AMD with a strike price of $32.50.The option premium is $5.53. Suppose the price of AMD is $36.25 a share and I choose to exercise the option. What are my total gains or losses? Please provide total dollar amount of gains or losses not an amount per share.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT