A Law Establishing a Maximum Legal Price for a Good

question 222

Multiple Choice

A law establishing a maximum legal price for a good or service (rent controls for example) is known as

• A) an equilibrium price.
• B) a price floor.
• C) a price ceiling.
• D) a price wall.

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Definitions:

Nonrival Consumption

A characteristic of certain goods where one person's use does not diminish the availability or quality of the good for others.

Rival Consumption

A situation where one person's consumption of a good reduces the ability of another person to consume the same good.

Nonexcludable

A characteristic of a good or service indicating that it is not possible to prevent non-paying customers from accessing it.

Excludable

A property of a good whereby it is possible to prevent individuals from enjoying the good unless they pay for it.