The price of gasoline is generally higher in Hawaii than in the continental United States. Therefore, the Hawaiian legislature passed a law forbidding gas stations from charging a price higher than the average price of gas on the West Coast of the United States. This is an example of:
A) a price floor.
B) a price ceiling.
C) a quota.
D) a tax.

Question

Quizplus · Accepted Answer

A price ceiling is a government-imposed limit on how high a price can be charged for a product, in this case, gasoline. The law prevents gas stations in Hawaii from charging more than a certain amount, which is the average price on the West Coast.

The Price of Gasoline Is Generally Higher in Hawaii Than