Which of the Following Statements Best Differentiates Price Ceilings and Price

question 94

Multiple Choice

Which of the following statements best differentiates price ceilings and price floors?

• A)Price ceilings represent minimum prices,while price floors represent maximum prices.
• B)Binding price ceilings are always set below the equilibrium price,whereas binding price floors are always set above the equilibrium price.
• C)Price ceilings are always effective,whereas price floors are rarely effective.
• D)Price floors cause shortages to appear,whereas price ceilings have the opposite effect.
• E)Price ceilings and price floors have the same effects.

Understand the impact of expectations on consumer demand.

Identify the role of complements and substitutes in affecting the demand for a good.

Analyze how changes in preferences, incomes, and prices of related goods affect demand.

Understand the relationship between price changes and consumer demand (income effect, substitution effect).

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