A price set below the current market price is a characteristic of price ceiling. Correct answer:C Price ceiling is type of price control. It is the maximum price a seller can charge ,that is legally established. When the ceiling is set below the market price, there will be excess demand or a supply shortage.
Option c) is correct.
A price set below the current market price is a characteristic of a price ceiling.
Further Explanation:
Price ceiling: It is defined as the maximum legal price that is chargeable by the seller or the service provider for the service, resource, or good.
Justification for the correct and incorrect answer:
a)
Price floor: This option is incorrect.
It is defined as the minimum legal price that is chargeable by seller or the service provider for the service, resource, or good.
b)
Regular price: This option is incorrect.
It refers to the price that is prevailing in the market.
c)
Price ceiling: This option is correct.
It is defined as the maximum legal price that is chargeable by the seller or the service provider for the service, resource, or good.
d)
Equilibrium price: This option is incorrect.
The equilibrium price is a price where the quantity demanded of service, resource, or good equals the quantity supplied.
Therefore, a price set below the current market price is a characteristic of a price ceiling.
Learn more:
1. Demand and type of goods
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2. Demand and supply of goods
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3. Elasticity of demand
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Answer details:
Grade: High School
Subject: Economics
Chapter: Market equilibrium
Keywords: the current market price, price floor, regular price, price ceiling, equilibrium price, a price set, economics, consumer, quantity of goods.
