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.
