Which Statement About Price Ceilings Is Correct

question 49

Multiple Choice

Which statement about price ceilings is correct?

• A) Whether a price ceiling is placed below or above the equilibrium price, it will always cause deadweight loss.
• B) A price ceiling will only cause deadweight loss if it is placed above the equilibrium price.
• C) A price ceiling will only cause deadweight loss if it is placed below the equilibrium price.
• D) Whether a price ceiling is placed below or above the equilibrium price, it will always cause a shortage of the good.

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Definitions:

Credibility

The quality of being trusted and believed in.

Useless

Lacking usefulness or efficacy; not producing the desired effect or having no practical value.

Antecedent

The earlier element in a logical statement, usually preceding the consequence in a conditional sentence.

Consequent

The outcome or result in a conditional statement, typically following the word "then" in an "if...then" construct.