Suppose the market clearing price for gasoline is $3.75 per gallon. Now suppose that policy makers pass a law requiring that the maximum price that can be charged is $2.75 per gallon. Such a situation is an example of
A) a price control that will lead to a surplus of gasoline on the market.
B) a price floor that will lead to a shortage of gasoline on the market.
C) a price ceiling that will lead to a shortage of gasoline on the market.
D) a price floor that will lead to a surplus of gasoline on the market.
Correct Answer:
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Q243: Q244: Q246: Q248: Price controls Q250: Nonprice rationing devices are required Q251: Q254: A price ceiling established below the market Q258: Price controls often generate Q271: Q277: Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents
A) exist when firms decide that
A) because the
A) more efficient markets.
B)
