Which of the following might explain why the government would create a price ceiling for a certain good?
A) The equilibrium price that would result in the market would be considered too high
B) The equilibrium price that would result in the market would be considered too low
C) The equilibrium quantity that would result in the market would be considered too high
D) The equilibrium quantity that would result in the market would be considered too low
E) The government never has a reason to create price floors or price ceilings

Question

Quizplus · Accepted Answer

The government may create a price ceiling if it believes that the equilibrium price in the market is too high and is creating a burden for consumers. By setting a maximum price, the government can ensure that the good is more affordable for consumers.

Which of the Following Might Explain Why the Government Would