Which of the Following Is True of Price Ceilings

question 1

Multiple Choice

Which of the following is true of price ceilings?

• A)Firms must charge the price established as a price ceiling.
• B)If the ceiling price is set above the free-market equilibrium price it will have no effect on the market.
• C)A ceiling price below the free-market equilibrium price is not binding.
• D)With a non-binding ceiling price an excess demand for the product will develop.
• E)With a binding ceiling price a surplus of the commodity will develop.

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Definitions:

Cultures

The shared values, customs, social behaviors, and artifacts of a group of people that differentiate them from other groups.

Need Theories

Psychological theories that suggest human behavior is motivated by the desire to fulfill specific basic needs, such as physiological, safety, social, esteem, and self-actualization needs.

Universality

The concept that certain principles, ideas, or traits are common, applicable, or beneficial across all cultures, situations, or groups.

Cultures

The shared values, beliefs, norms, and practices of a group of people that are passed down from generation to generation.