HYPERLINK "https://en.wikipedia.org/wiki/Nicol%C3%A1s_Maduro%22%20%5Co%20%22" Nicolás Maduro is the controversial president of Venezuela. Venezuela is also a major producer of petroleum products, which remain a critical component of Venezuela's economy. Suppose President Maduro wanted to increase his popularity with the citizens of Venezuela by enacting a government policy to reduce the price of gasoline sold at state-owned gas stations to 60% of the previous price. This policy is called a:
A)laissez faire policy.
B)price floor.
C)price ceiling.
D)quota.

Question

Quizplus · Accepted Answer

A price ceiling is a government policy that sets a maximum price that can be charged for a good or service. In this case, President Maduro wants to reduce the price of gasoline sold at state-owned gas stations, which can be achieved by implementing a price ceiling. A laissez-faire policy would involve the government not intervening in the market, a price floor would set a minimum price that cannot be undercut, and a quota would limit the quantity of a good that can be produced or sold.

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