If a Price Ceiling Is to Accomplish Its Intended Goal

question 9

Multiple Choice

If a price ceiling is to accomplish its intended goal of lowering overall spending, which of the following must be true?

• A)Demand must be relatively price inelastic.
• B)Demand must be relative price elastic.
• C)Demand must be perfectly inelastic.
• D)Demand must be perfectly elastic.
• E)Price elasticity of demand has nothing to do with overall spending.

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Definitions:

Offer Agreement

A detailed proposal by one party to enter into a contract, subject to acceptance by another party.

Adhesion Contract

A standardized contract prepared by one party, with little to no negotiation allowed, often in situations with unequal bargaining power.

Definite Offer

An offer that is clear, specific, and leaves no room for negotiation, often containing all the terms necessary for an enforceable agreement.

Definite Acceptance

Definite Acceptance refers to an unambiguous agreement by the offeree to meet the terms of the offer, forming a binding contract.