Price Ceilings and Price Floors

Price Ceilings

&

Price Floors​

by Kendrick Broadus

Multiple Choice

Which of the following would cause a change in supply?

• A change in market price

• A change in technology available

• A change in the number of sellers

• All of the above

Multiple Choice

Price ceilings lead to ___________ and price floors lead to ___________.

• surplus;shortage

• shortage;surplus

Multiple Choice

An effective price floor must be set above equilibrium, resulting in:

• a shortage

• a surplus

• limited choices

• None of the above

Open Ended

In terms of supply and demand, what problem exists in the market for concert tickets?

Open Ended

What is one idea you can think of to help solve this problem?

Open Ended

If the price Miley Cyrus charges for each ticket is below equilibrium, why doesn’t she raise her prices?

Multiple Choice

What is the equilibrium price and quantity for the tickets?

• 100, 30

• 100, 50

• 75, 40

• 60, 30

Multiple Choice

When a price ceiling is in place keeping the price below the market price, what’s larger: quantity demanded or quantity supplied?

• Quantity demanded

• Quantity supplied.

• Indeterminate with the given information.

• Neither

Multiple Choice

Suppose that the market for coats is described as follows: What is the equilibrium price of coats?

• 120

• 100

• 80

• 60

Multiple Choice

Suppose the government sets a price ceiling of $80. How large will the shortage be?

• 5 million coats

• 4 million coats

• 3 million coats

• 2 million coats

Multiple Choice

When a price ceiling is in place keeping the price below the market price, which is true of the quantity demanded & quantity supplied?

• Quantity Demanded is greater

• Quantity Supplied is greater

• Quantity Demanded equals Quantity supplied

Multiple Choice

What is the equilibrium quantity in this graph?

• $1.50

• $1.00

• 600

• 800

Multiple Choice

At the price of 1.00 there is a 

• shortage of 200

• surplus of 200

• shortage of 400

• surplus of 400

Multiple Choice

An effective price floor must be set above equilibrium, resulting in:

• a shortage

• a surplus

• limited choices

• None of the above

Multiple Choice

If the government set the price at $700, would that be a price ceiling or floor?

• Price Ceiling

• Price Floor 

• Neither

Multiple Choice

If the government set the price at $300, what would be the result?

• Surplus of 4,000

• Surplus of 2,000

• Shortage of 4,000

• Shortage of 2,000

Multiple Choice

If the government creates a price floor of $80, which one of the following statements is correct?

• The quantity demanded = 60

• The quantity supplied = 180

• There is a shortage of 140

• There price floor is ineffective

Multiple Choice

If the government creates a price ceiling of $30, which one of the following statements is correct?

• The quantity demanded = 60

• The quantity supplied = 160

• There is a surplus of 100

• There is a shortage of 100

Multiple Select

If the Market price is $50,, which of the following is True of Quantity Supplied and Quantity Demanded

• quantity demanded = 120

• quantity supplied = 120

• quantity demanded = 120 & quantity supplied =120

• quantity demanded = quantity supplied

Multiple Choice

What would result if the price were set at $1.75

• Surplus, Quantity Supplied is greater

• Shortage, Quantity Demanded is greater

• Quantity Supplied = Quantity Demanded

• $1.75

Multiple Choice

In a free market, the price would be

• $10

• $8

• $6.

• $4

Multiple Choice

A price ceiling is the highest price the government will allow to be charged for a product. 

• True

• False

Multiple Choice

What does this graph show?

• Shortage
• Surplus
• Supply Table
• Equilibrium

Multiple Choice

Price ceilings lead to ___________ and price floors lead to ___________.

• surplus;shortage
• shortage;surplus

Multiple Choice

What is the result of the government implementing a price floor of $60

• There would be a shortage of 100 since it is cheaper for consumers 
• There would be a surplus of 100 because it is more expensive for consumers 
• There would be a shortage of 100 because it is assisting the suppliers
• There would be a surplus of 100 because it is beneficial to consumers 

Multiple Choice

If there is a surplus in the market, the price is likely to...

• increase.

• decrease.

• fluctuate.

• stay the same.