Question

A price cap regulation​ _______. eliminates deadweight loss is often combined wit a government subsidy, which makes the market efficient is a price ceiling sets price equal to marginal cost

Answer 1

Options:

A price cap regulation​ _______.

a. eliminates deadweight loss

b. is often combined with a government subsidy,

c. which makes the market efficient is a price ceiling

d. sets price equal to marginal cost

Answer:

c. which makes the market efficient is a price ceiling

Explanation:

Price ceilings are usually enforced in other to maintain an efficient market. They directed mainly to sellers which restricts the price of a commodity to a maximum amount.

A good example is the price of gasoline, in many countries, the law mandates a maximum price gas stations can sell.