What the competition charges and what consumers are willing to pay sets the price ______ while costs of producing the product establish the price ______.

Question

Quizplus · Accepted Answer

The price ceiling is determined by what the competition charges and what consumers are willing to pay, as it sets the maximum price that can be charged. The price floor is established by the costs of producing the product, as it sets the minimum price to cover those costs.

What the Competition Charges and What Consumers Are Willing to Pay