-An effective price ceiling occurs when
A) the government sets a maximum price for a good above the equilibrium price.
B) the government sets a minimum price for a good above the equilibrium price.
C) the government sets a minimum price for a good below the equilibrium price.
D) the government sets a maximum price for a good below the equilibrium price.

Question

-An effective price ceiling occurs when
A) the government sets a maximum price for a good above the equilibrium price. 
B) the government sets a minimum price for a good above the equilibrium price. 
C) the government sets a minimum price for a good below the equilibrium price. 
D) the government sets a maximum price for a good below the equilibrium price.

Quizplus · Accepted Answer

An effective price ceiling is one that is set below the market equilibrium price. This means the maximum price allowed by the government is lower than what the market would naturally set, leading to a shortage of the good since demand will exceed supply at that price point.

-An Effective Price Ceiling Occurs When