A price ceiling is
A)often imposed on markets in which "cutthroat competition" would prevail without a price ceiling.
B)a legal maximum on the price at which a good can be sold.
C)often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price ceiling.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

A price ceiling is a legal maximum on the price at which a good can be sold. It is often imposed by governments in order to protect consumers from high prices in markets where there is limited competition or in which prices are rising rapidly. A price ceiling can cause shortages and long wait times for consumers due to suppliers' inability to charge a price that covers their costs.

A Price Ceiling Is