FIGURE 5-1
-Refer to Figure 5-1.In this market,suppose the government announces that the price must be P₃or lower.This price (P₃) is referred to as

Question

FIGURE 5-1 -Refer to Figure 5-1.In this market,suppose the government announces that the price must be P₃or lower.This price (P₃)is referred to as

Quizplus · Accepted Answer

A price ceiling is a legal maximum price set by the government that is below the equilibrium price. P₃ is a price set by the government that is lower than the equilibrium price in Figure 5-1. Therefore, it is a price ceiling.

FIGURE 5-1 -Refer to Figure 5-1.In This Market,suppose the Government Announces That