The dictator of a small country restricts the price of cars to an amount less than or equal to $1,200 (a price below the equilibrium price for cars).Such a policy would set a:
A)price floor.
B)price ceiling.
C)quota.
D)tariff.

Question

Quizplus · Accepted Answer

A price ceiling is a government-imposed limit on how high a price can be charged for a good or service. In this case, the dictator is restricting the price of cars to below the equilibrium price, creating a price ceiling.

The Dictator of a Small Country Restricts the Price of Cars