Both Price Floors and Price Ceilings Lead to

question 74

Multiple Choice

Both price floors and price ceilings lead to

• A) shortages.
• B) surpluses.
• C) reductions in quality.
• D) a reduction in the quantity traded.

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Definitions:

Property Right

A legal right or privilege, granted by law, to use, control, and derive benefits from a resource or property.

Marginal Social Cost

The cumulative expense to society for creating one more unit of a product or service, encompassing both the personal costs and any external effects.

Private Marginal Cost

Private marginal cost refers to the cost that a company incurs for producing an additional unit of a good or service, excluding any external costs.

Marginal Social Cost

The total cost to society of producing one additional unit of a good or service.