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Why are price floors and price ceilings posed?
if the market price imposed by suppliers are too high for consumers then the price ceilings are imposed....if the market price is too low for the producers then price floors is imposed.
What is the impact on the economy if price ceiling or price floor were removed?
Price ceiling is government rules or laws setting price floors or ceilings that forbid the adjustment of price to clear markets. Price ceilings make it illegal for sellers to charge more than a specific maximum price. ceilings may be introduced when a shortage of a commodity threatens to raise its price a lot.
Do price ceilings misallocate resources?
yes
Does a perfectly competitive market demonstrate the need for subsidies and price ceilings?
no
What will happen to supply over time in markets with price ceilings?
whats the answer?
A corporation is least likely to have which advantage?
establishment of price ceilings
Why are price floors and price ceilings posed?
if the market price imposed by suppliers are too high for consumers then the price ceilings are imposed....if the market price is too low for the producers then price floors is imposed.
What is the impact on the economy if price ceiling or price floor were removed?
Price ceiling is government rules or laws setting price floors or ceilings that forbid the adjustment of price to clear markets. Price ceilings make it illegal for sellers to charge more than a specific maximum price. ceilings may be introduced when a shortage of a commodity threatens to raise its price a lot.
Do price ceilings misallocate resources?
yes
Does a perfectly competitive market demonstrate the need for subsidies and price ceilings?
no
What will happen to supply over time in markets with price ceilings?
whats the answer?
What do economists mean when they say that price floors and ceilings stifle the rationing function of prices and distort resource allocation?
When economist says price floors means above equilibrium and leads to undermanned surplus. When they say price ceilings it means price below equilibrium which leads to unsupplied shortage.
The government can prevent the shortages that accompany price ceilings by doing what?
Ration
Do producers tend to favor price floors or price ceilings?
price floors because, when binding, price floors increase price above the equilibrium and may increase producer surplus.
What happens when government imposes price ceilings and floors in a market?
efficiency
Why does government place price ceilings on some essential goods?
to limit the impact of equilibrium pricing
How does price ceilings affect supply and demand?
A price ceiling prevents a price from rising above the ceiling. It represents an upper limit on the price of something. If wheat has a price ceiling of $400 per metric tonne, $400 is the highest amount any what supplier can charge. If the market price for wheat is below the ceiling, say $200 in this example, then the ceiling has no effect on prices; the ceiling is not binding. If the market price is higher than the ceiling, supply and demand cannot reach equilibrium and there is a shortage in the commodity. Artificially low prices result in demand that exceeds supply. The price, however, remains stuck at the ceiling.
