A price ceiling is
A) a maximum legal price.
B) a minimum legal price.
C) an equilibrium price.
D) a market-determined price.
E) the highest price at which the quantity demanded equals the quantity supplied.

Question

Quizplus · Accepted Answer

A price ceiling is a government-imposed maximum legal price that prohibits sellers from charging more than a certain amount. The purpose of a price ceiling is to protect consumers from high prices, but it can lead to shortages if the price ceiling is set below the market equilibrium price.

A Price Ceiling Is