(Figure: The Market for Accounting Textbooks) Use Figure: The Market for Accounting Textbooks. Suppose the government believes the producers of accounting textbooks are not profitable, and it wants to make sure textbook producers are profitable. It could impose a control called a price _____, and for it to be binding, one possible price would be _____.
A)floor; $180
B)floor; $80
C)ceiling; $80
D)ceiling; $180

Question

(Figure: The Market for Accounting Textbooks) Use Figure: The Market for Accounting Textbooks. Suppose the government believes the producers of accounting textbooks are not profitable, and it wants to make sure textbook producers are profitable. It could impose a control called a price _____, and for it to be binding, one possible price would be _____. 
A)floor; $180 
B)floor; $80 
C)ceiling; $80 
D)ceiling; $180

Quizplus · Accepted Answer

To ensure producers of accounting textbooks are profitable, the government would want to impose a price floor above the current market equilibrium price. Based on the graph, the current equilibrium price is around $80, so a binding price floor would need to be set above this price. Option A) suggests a price floor of $180, which is well above the current equilibrium price and would likely result in textbook producers receiving higher profits. Therefore, A) is the best choice.

(Figure: the Market for Accounting Textbooks) Use Figure: the Market