28. What do we know about price ceilings and price floo They cause surpluses and

Question

28. What do we know about price ceilings and price floo They cause surpluses and shortages to persist since equilibrium price They are imposed because they can make the poor in the economy better off without causing adverse effects a. price cannot adjust to th et b. C. They are desirable because they make markets more efficient as well as equitable. d· They can be enacted to restore a market to equilibrium. 29. Which of the following goods would satisfy attributes of a club good? a congested public highway a.

Explanation / Answer

Solution: They cause surpluses and shortages to persist since price cannot adjust to the market equilibrium price

Explanation: Price floors generate to surpluses, and price ceilings lead to shortages. To be effective, a price floor has to be set above and a price ceiling has to be set below the equilibrium price

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