The graph shows the price of a good compared to the quantity demanded and the quantity supplied. On this graph, the top horizontal line r

Question

The graph shows the price of a good compared to the quantity demanded and the quantity supplied. On this graph, the top horizontal line represents

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2022-04-09T23:22:59+00:00 0 Answers 0

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  1. Brielle
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    2022-04-09T23:24:19+00:00

    Answer choices are:

    A) An ineffective price floor set above equilibriumn

    B) An effective price floor set below equilibriumn

    C) An ineffective price ceiling set above equilibriumn

    D) An effective price ceiling set below equilibrium

    Answer:

    A. An ineffective price floor set above the equilibrium.

    Explanation:

    A price floor is the lowest possible price at which a certain type of good is sold at. This is usually set by the government so as to keep the rate of goods from decreasing below a certain point. This price floor is indicated by a horizontal line on the graph above the intersection of the supply and demand curves.

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