Which of the Following Statements Is True About Price Ceilings

question 183

Multiple Choice

Which of the following statements is true about price ceilings?

• A) Price ceilings create surpluses for goods but shortages for services.
• B) Price ceilings cause goods to be rationed by some other means than legally determined market prices.
• C) Ration coupons are the only way to ration goods when price ceilings are in place.
• D) All of these choices are correct.

---

Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service relative to what they actually pay.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, reflecting the producer's benefit.

Crude Oil

A naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials used as a fuel and in the production of chemicals, plastics, and other materials.

Tariff

A tax imposed on imported goods and services to increase their price, protect domestic industries, or generate revenue.