For a Price Ceiling to Have an Impact on a Market

question 167

Multiple Choice

For a price ceiling to have an impact on a market it must be set:

• A) above the equilibrium price.
• B) below the equilibrium price.
• C) equal to the equilibrium price.
• D) anywhere along the demand curve.

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Definitions:

Cash Commodity Subsidies

Financial support provided by governments to farmers for certain commodities, paid in cash.

Countercyclical Payments

Government payments to agricultural producers that increase when market prices fall below certain thresholds, aiming to stabilize farmers' incomes.

Farm Subsidies

Governmental financial support to farmers aimed at stabilizing food prices, ensuring a stable food supply, and supporting agricultural economic activities.