Price Floors & Price Ceilings

Price Floors & Price Ceilings

Multiple Choice

In order to be effective, a price ceiling must be set _____ the equilibrium price.

• Below

• Above

• To the right of

• To the left of

Multiple Choice

According to the Supply & Demand model, a price ceiling will lead to a....

• Surplus

• Shortage

Multiple Choice

True or False: According to the Supply & Demand model, a price ceiling will lead to deadweight loss.

• True

• False

Multiple Choice

In order to be effective, a price floor must be set _____ the equilibrium price.

• Below

• Above

• To the right

• To the left

Multiple Choice

According to the Supply & Demand model, a price floor will lead to a....

• Surplus

• Shortage

Multiple Choice

True or False: According to the Supply & Demand model, a price floor will lead to deadweight loss in a perfectly competitive market.

• True

• False