ECS1501
price ceiling - (correct Answer) - A legal maximum on the price at which a good can be sold
price floor - (correct Answer) - A legal minimum on the price at which a good can be sold
Price ceiling impacts - (correct Answer) - A persistent shortage (excess demand) develops. "Black
Market" develops. Opportunities for corruption and bribery are created.
Price flooring impacts - (correct Answer) - A persistent surplus develops. Consumers have to pay
artificially high prices. Inefficient producers are protected and manage to survive. The disposal of the
market surpluses usually entails further costs to tax payers and welfare losses to society.
price elasticity of demand - (correct Answer) - the percentage change in quantity demanded divided by
the corresponding percentage change in its price
price ceiling - (correct Answer) - A legal maximum on the price at which a good can be sold
price floor - (correct Answer) - A legal minimum on the price at which a good can be sold
Price ceiling impacts - (correct Answer) - A persistent shortage (excess demand) develops. "Black
Market" develops. Opportunities for corruption and bribery are created.
Price flooring impacts - (correct Answer) - A persistent surplus develops. Consumers have to pay
artificially high prices. Inefficient producers are protected and manage to survive. The disposal of the
market surpluses usually entails further costs to tax payers and welfare losses to society.
price elasticity of demand - (correct Answer) - the percentage change in quantity demanded divided by
the corresponding percentage change in its price
