Refer to the information provided in Figure 4.3 below to answer the question(s) that follow. Figure 4.3
-Refer to Figure 4.3. The government setting the price of pencils at $0.50 would be an example of an effective
A) price floor.
B) price ceiling.
C) market equilibrium.
D) price shortage.

Question

Refer to the information provided in Figure 4.3 below to answer the question(s) that follow.  Figure 4.3
-Refer to Figure 4.3. The government setting the price of pencils at $0.50 would be an example of an effective
A) price floor. 
B) price ceiling. 
C) market equilibrium. 
D) price shortage.

Quizplus · Accepted Answer

The government setting the price of pencils at $0.50 would be an example of an effective price floor because it would set a minimum price for pencils, ensuring that producers would receive at least $0.50 for each pencil they sell.

Refer to the Information Provided in Figure 4