An upper limit on the price of a good or service is a
A)Price floor
B)Price ceiling
C)Consumer surplus
D)Producer surplus

Question

Quizplus · Accepted Answer

A price ceiling sets a limit on the maximum price that can be charged for a good or service. It is typically set by governments to protect consumers from high prices. A price floor, on the other hand, sets a minimum price, usually used to support producers' income. Consumer and producer surplus are measures of the welfare gained by both consumers and producers in a market. While a price ceiling can potentially increase consumer surplus, it can also lead to shortages and reduced quality of goods and services.

An Upper Limit on the Price of a Good or Service