Which of the below is true?
A)A price ceiling reduces the quantity exchanged on the market, but a price floor increases the quantity exchanged on the market.
B)A price ceiling increases the quantity exchanged on the market, but a price floor decreases the quantity exchanged on the market.
C)Both price floors and price ceilings reduce the quantity exchanged in the market.
D)Both price floors and price ceilings increase the quantity exchanged in the market.

Question

Which of the below is true?
A)​A price ceiling reduces the quantity exchanged on the market, but a price floor increases the quantity exchanged on the market.
B)​A price ceiling increases the quantity exchanged on the market, but a price floor decreases the quantity exchanged on the market.
C)​Both price floors and price ceilings reduce the quantity exchanged in the market.
D)​Both price floors and price ceilings increase the quantity exchanged in the market.

Quizplus · Accepted Answer

Both price floors and price ceilings limit the ability of prices to adjust to market conditions, leading to a reduced quantity exchanged in the market. A price ceiling prevents prices from rising above a certain level, while a price floor prevents prices from falling below a certain level. Both ceiling and floor are artificial restraints on the market, which results in a mismatch between supply and demand, leading to a reduction in quantity exchanged.

Which of the Below Is True