Exhibit 4-3 Refer to Exhibit 4-3. Which of the following is true? A)If price P₁ is set as a price ceiling, the price ceiling will have an effect on the market for good X. B)If price P₁ is set as a price floor, the price floor will have an effect on the market for good X. C)Price P₁ is the equilibrium price for good X. D)If price P₁ is set as a price floor, then it is the highest price that can legally be charged in the market for good X.

Question

Quizplus · Accepted Answer

Setting price P₁ as a price ceiling would mean that the price cannot exceed that level, which could cause shortages in the market as suppliers are unable to charge a higher price to cover their costs. Therefore, it would have an effect on the market for good X.

Exhibit 4-3 Refer to Exhibit 4-3. Which of the Following Is True