Price Ceiling And Price Floor Questions

A government imposes price ceilings in order to keep the price of some necessary good or service affordable.

Price ceiling and price floor questions.

Quiz questions will focus on topics such as binding price ceiling lines and the term given to how. Price floors prevent a price from falling below a certain level. For example in 2005 during hurricane katrina the price of bottled water increased above 5 per gallon. Real life example of a price ceiling in the 1970s the u s.

10 questions show answers. The original intersection of demand and supply occurs at e 0 if demand shifts from d 0 to d 1 the new equilibrium would be at e 1 unless a price ceiling prevents the price from rising. A price ceiling is a legal maximum price that one pays for some good or service. The next section discusses price floors.

Price ceilings prevent a price from rising above a certain level. If a price floor was set at 320 what quantity would be purchased. Price floor and price ceiling draft. The opposite of a price ceiling is a price floor which sets a minimum price at which a product or service can be sold.

This quiz worksheet combination will test your understanding of price ceilings and price floors. A price ceiling example rent control.