A government-imposed maximum price will have no economic impact if
A) it is below the equilibrium price.
B) it is at or below the equilibrium price.
C) it is above the equilibrium price.
D) there is a fixed supply of the good.

Question

Quizplus · Accepted Answer

A government-imposed maximum price above the equilibrium price will have no economic impact because the market price determined by supply and demand would naturally be lower than the imposed maximum, allowing the market to function without interference.

A Government-Imposed Maximum Price Will Have No Economic Impact If