Use the following to answer question:
-(Figure: The Market for Economics Textbooks)Use Figure: The Market for Economics Textbooks.Suppose the government believes textbooks are too expensive and it wants to make sure textbooks are affordable to more students.This type of price control is called a price _____,and one possible binding price control would be _____.
A)floor;$100
B)floor;$40
C)ceiling;$40
D)ceiling;$100

Question

Use the following to answer question: 
-(Figure: The Market for Economics Textbooks)Use Figure: The Market for Economics Textbooks.Suppose the government believes textbooks are too expensive and it wants to make sure textbooks are affordable to more students.This type of price control is called a price _____,and one possible binding price control would be _____.
A)floor;$100 
B)floor;$40 
C)ceiling;$40 
D)ceiling;$100

Quizplus · Accepted Answer

A price ceiling is a government-imposed limit on the price charged for a product or service. In this case, the government wants to make textbooks more affordable to students, so it would impose a price ceiling on the market for economics textbooks. The most likely binding price control would be $40, as it is below the equilibrium price and would therefore affect the market price.

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