Chapter 6 Price Controls Flashcards
1
Q
What is a price ceiling?
A
a maximum legal price which is only effective when set below equilibrium
2
Q
What is a price floor?
A
A minimum legal price which is only effective when set above equilibrium
3
Q
When is there a shortage?
A
when quantity demanded exceeds quantity supplied
4
Q
When is there a surplus?
A
when quantity supplied exceeds quantity demanded
