Would that be a price floor or ceiling at today prices

Reference no: EM133437042

Question: Free markets generally result in equilibrium prices at the intersection of supply and demand. This is sometimes interrupted by the government. In these cases, the government passes a law or regulation fixing the "price" above or below what would otherwise be the equilibrium price.

1) Imagine that the government mandated that the highest price that can be charged for a movie ticket is $25. Would that be a price floor or ceiling at today's prices? What impact would it have?

Reference no: EM133437042

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