Who or what sets the price ceiling in a given market?
A) IRS
B) Competitors
C) Demand
D) Prices

Question

Quizplus · Accepted Answer

The price ceiling is the highest price that can be charged for a certain product or service. Demand is the quantity of the product or service that people are willing and able to buy at a given price. Therefore, the demand for the product or service sets the maximum price that can be charged before demand drops off significantly. If the price is set too high, demand will decrease and if the price is too low, it may result in shortages. Therefore, demand is the key determinant of the price ceiling in a given market.

Who or What Sets the Price Ceiling in a Given