Which of the following is the correct term used for an artificial cap on the price of a good?
A)Price floor
B)Price ceiling
C)Maximum input
D)Minimum wage

Question

Quizplus · Accepted Answer

Price ceiling is the correct term used for an artificial cap on the price of a good.
Key Takeaway: When looking at the equilibrium of supply and demand, it is always important to remember the two unique scenarios of the price ceiling and the price floor. A price ceiling is an artificial cap on the price of a good. The classic example of a price ceiling is rent control, which limits the amounts that landlords can charge tenants in many cities. A price floor is the opposite-an artificial limit on a minimum price. The classic example of a price floor is the minimum wage.

Which of the Following Is the Correct Term Used for an Artificial