Use the following to answer questions:
-(Figure: The Market for Economics Textbooks)Use Figure: The Market for Economics Textbooks.Suppose that the government believes textbooks are too expensive and it wants to make sure textbooks are affordable to more students.This type of price control is called a price _____,and one possible binding price control would be _____.
A) floor;$100
B) floor;$40
C) ceiling;$40
D) ceiling;$100

Question

Use the following to answer questions: 
-(Figure: The Market for Economics Textbooks)Use Figure: The Market for Economics Textbooks.Suppose that the government believes textbooks are too expensive and it wants to make sure textbooks are affordable to more students.This type of price control is called a price _____,and one possible binding price control would be _____.
A) floor;$100 
B) floor;$40 
C) ceiling;$40 
D) ceiling;$100

Quizplus · Accepted Answer

The government wants to make sure textbooks are affordable to more students, so they will likely impose a price ceiling, which is a maximum price that can be charged for a good. Option A and D are incorrect because a price floor is a minimum price that can be charged for a good. Option B is incorrect because $40 is already below the equilibrium price, so it would not be a binding price control. Therefore, the only possible option is a price ceiling of $40, which would make textbooks more affordable for students.

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