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
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
