refer to the following figure(s). price p1\nprice of good x\nquantity of good x\nis the equilibrium…
refer to the following figure(s). price p1\nprice of good x\nquantity of good x\nis the equilibrium price.\ncan be an effective price floor.\nnone of the other answers are right.\ncan be an effective price ceiling.
Answer
Explanation:
Step1: Recall equilibrium concept
Equilibrium is where demand (D) and supply (S) curves intersect. Here, equilibrium price is P2 and quantity is Q2.
Step2: Analyze price - floor
A price - floor is a minimum price set above the equilibrium price. P3 can be an effective price - floor as it is above P2.
Step3: Analyze price - ceiling
A price - ceiling is a maximum price set below the equilibrium price. P1 is below P2 and can be an effective price - ceiling.
Answer:
can be an effective price ceiling.