4 tb mc qu. 03 - 205 refer to the diagram. an... refer to the diagram. an effective government - set price…
4 tb mc qu. 03 - 205 refer to the diagram. an... refer to the diagram. an effective government - set price ceiling is best illustrated by multiple choice price b. quantity e. price c. price a.
Answer
Brief Explanations:
An effective price - ceiling is set below the equilibrium price. In the diagram, the equilibrium price is at the intersection of the demand (D) and supply (S) curves. Price A is below the equilibrium price, which would create a shortage as quantity demanded exceeds quantity supplied at that price. Price B is the equilibrium price, price C is above the equilibrium price (a price - floor would be above equilibrium, not a price - ceiling), and quantity E is a quantity, not a price.
Answer:
D. price A