Asked by
Nadia Alejandre
on Oct 13, 2024
Verified
If the equilibrium price of lettuce is $.80 per head and the government imposes a price floor of $.70 per head,the price of lettuce will
A) decrease to $.70.
B) remain at $.80.
C) decrease to $.75.
D) be impossible to determine.
Price Floor
A government- or authority-imposed minimum price that can be charged for a commodity, to prevent prices from dropping too low.
Lettuce
A leafy green vegetable, commonly used in salads and other dishes, known for its crisp texture and mild flavor.
Equilibrium Price
The equilibrium price where goods supplied and goods demanded are in balance.
- Gain an understanding of how market conditions shift following the removal of price ceilings and floors.
- Elucidate the contribution of supply and demand in the formation of market equilibrium and the fixation of prices.
Verified Answer
DA
Learning Objectives
- Gain an understanding of how market conditions shift following the removal of price ceilings and floors.
- Elucidate the contribution of supply and demand in the formation of market equilibrium and the fixation of prices.