Question

An example of an ineffective price ceiling would be the government setting the price of wheat at ________ per bushel when the market price is at $5.00 per bushel.A) $2.25B) $3.00C) $4.75D) $6.00

Answer 1

D) $6.00

Step-by-step explanation:

Price ceiling is a check on the price of a good or service imposed by the government to protect consumers by making sure that prices do not become excessively high. For the measure to be effective, the price set by the price ceiling must be below the natural equilibrium price.

If the the government setting the price of wheat at $6.00 per bushel which is above the market price of $5.00 per bushel that is an ineffective price ceiling.