Figure 2.7.1
-Refer to Figure 2.7.1 above. If the government wants to set a maximum imposed price on this market, it will set the price at:

Question

Figure 2.7.1 -Refer to Figure 2.7.1 above. If the government wants to set a maximum imposed price on this market, it will set the price at: A) P₀ B) P₁ C) P₂ D) Either P₁ or P₂

Quizplus · Accepted Answer

The government wants to set a maximum imposed price, which means it cannot be higher than the current market equilibrium price of P₁. Setting it lower than this price would result in a surplus of supply, and setting it higher would not be effective in controlling prices. Therefore, the best choice is option B, P₁.

Figure 2.7.1 -Refer to Figure 2.7.1 Above. If the Government Wants to Wants