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Direction: Read the following passage and answer the questions that follows:More specifically, a price ceiling (in other words, a maximum price) is put into effect when the government believes the price is too high and sets a maximum price that producers can charge; this price must lie below the equilibrium price in order for the price ceiling to have an effect.The price ceiling is usually instituted via law and is typically applied to necessary goods like food, rent, and energy sources in order to ensure that everyone has access to them.Benefits and Downsides:Price ceilings are beneficial to society, and are often necessary, in that they make sure that essential goods are financially accessible to the average person, at least in the short run. By lowering costs, price ceilings also have the beneficial effect of helping to stimulate demand, which can contribute to the health of an economy.However, there can also be downsides to price ceilings. While they stimulate demand, price ceilings can also cause shortages. Where the ceiling is set, there is more demand than at the equilibrium price. This means that the amount of the good or service supplied is less than the quantity demanded.For example, in agriculture, medicine, and education, many governments set maximum prices to make the needed goods or services more affordable. Producers may respond to such an economic situation by rationing supplies, decreasing production levels or lowering the quality of production, making the consumer pay extra for otherwise free elements of the good (features, options, etc.), and more.Q. How do the producers respond to the situation of price ceiling?a)Rationing suppliesb)Decreasing production levelc)Lowering the quality of productiond)All of the aboveCorrect answer is option 'D'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: Read the following passage and answer the questions that follows:More specifically, a price ceiling (in other words, a maximum price) is put into effect when the government believes the price is too high and sets a maximum price that producers can charge; this price must lie below the equilibrium price in order for the price ceiling to have an effect.The price ceiling is usually instituted via law and is typically applied to necessary goods like food, rent, and energy sources in order to ensure that everyone has access to them.Benefits and Downsides:Price ceilings are beneficial to society, and are often necessary, in that they make sure that essential goods are financially accessible to the average person, at least in the short run. By lowering costs, price ceilings also have the beneficial effect of helping to stimulate demand, which can contribute to the health of an economy.However, there can also be downsides to price ceilings. While they stimulate demand, price ceilings can also cause shortages. Where the ceiling is set, there is more demand than at the equilibrium price. This means that the amount of the good or service supplied is less than the quantity demanded.For example, in agriculture, medicine, and education, many governments set maximum prices to make the needed goods or services more affordable. Producers may respond to such an economic situation by rationing supplies, decreasing production levels or lowering the quality of production, making the consumer pay extra for otherwise free elements of the good (features, options, etc.), and more.Q. How do the producers respond to the situation of price ceiling?a)Rationing suppliesb)Decreasing production levelc)Lowering the quality of productiond)All of the aboveCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: Read the following passage and answer the questions that follows:More specifically, a price ceiling (in other words, a maximum price) is put into effect when the government believes the price is too high and sets a maximum price that producers can charge; this price must lie below the equilibrium price in order for the price ceiling to have an effect.The price ceiling is usually instituted via law and is typically applied to necessary goods like food, rent, and energy sources in order to ensure that everyone has access to them.Benefits and Downsides:Price ceilings are beneficial to society, and are often necessary, in that they make sure that essential goods are financially accessible to the average person, at least in the short run. By lowering costs, price ceilings also have the beneficial effect of helping to stimulate demand, which can contribute to the health of an economy.However, there can also be downsides to price ceilings. While they stimulate demand, price ceilings can also cause shortages. Where the ceiling is set, there is more demand than at the equilibrium price. This means that the amount of the good or service supplied is less than the quantity demanded.For example, in agriculture, medicine, and education, many governments set maximum prices to make the needed goods or services more affordable. Producers may respond to such an economic situation by rationing supplies, decreasing production levels or lowering the quality of production, making the consumer pay extra for otherwise free elements of the good (features, options, etc.), and more.Q. How do the producers respond to the situation of price ceiling?a)Rationing suppliesb)Decreasing production levelc)Lowering the quality of productiond)All of the aboveCorrect answer is option 'D'. Can you explain this answer?.

Solutions for Direction: Read the following passage and answer the questions that follows:More specifically, a price ceiling (in other words, a maximum price) is put into effect when the government believes the price is too high and sets a maximum price that producers can charge; this price must lie below the equilibrium price in order for the price ceiling to have an effect.The price ceiling is usually instituted via law and is typically applied to necessary goods like food, rent, and energy sources in order to ensure that everyone has access to them.Benefits and Downsides:Price ceilings are beneficial to society, and are often necessary, in that they make sure that essential goods are financially accessible to the average person, at least in the short run. By lowering costs, price ceilings also have the beneficial effect of helping to stimulate demand, which can contribute to the health of an economy.However, there can also be downsides to price ceilings. While they stimulate demand, price ceilings can also cause shortages. Where the ceiling is set, there is more demand than at the equilibrium price. This means that the amount of the good or service supplied is less than the quantity demanded.For example, in agriculture, medicine, and education, many governments set maximum prices to make the needed goods or services more affordable. Producers may respond to such an economic situation by rationing supplies, decreasing production levels or lowering the quality of production, making the consumer pay extra for otherwise free elements of the good (features, options, etc.), and more.Q. How do the producers respond to the situation of price ceiling?a)Rationing suppliesb)Decreasing production levelc)Lowering the quality of productiond)All of the aboveCorrect answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce. Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.

Here you can find the meaning of Direction: Read the following passage and answer the questions that follows:More specifically, a price ceiling (in other words, a maximum price) is put into effect when the government believes the price is too high and sets a maximum price that producers can charge; this price must lie below the equilibrium price in order for the price ceiling to have an effect.The price ceiling is usually instituted via law and is typically applied to necessary goods like food, rent, and energy sources in order to ensure that everyone has access to them.Benefits and Downsides:Price ceilings are beneficial to society, and are often necessary, in that they make sure that essential goods are financially accessible to the average person, at least in the short run. By lowering costs, price ceilings also have the beneficial effect of helping to stimulate demand, which can contribute to the health of an economy.However, there can also be downsides to price ceilings. While they stimulate demand, price ceilings can also cause shortages. Where the ceiling is set, there is more demand than at the equilibrium price. This means that the amount of the good or service supplied is less than the quantity demanded.For example, in agriculture, medicine, and education, many governments set maximum prices to make the needed goods or services more affordable. Producers may respond to such an economic situation by rationing supplies, decreasing production levels or lowering the quality of production, making the consumer pay extra for otherwise free elements of the good (features, options, etc.), and more.Q. How do the producers respond to the situation of price ceiling?a)Rationing suppliesb)Decreasing production levelc)Lowering the quality of productiond)All of the aboveCorrect answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Direction: Read the following passage and answer the questions that follows:More specifically, a price ceiling (in other words, a maximum price) is put into effect when the government believes the price is too high and sets a maximum price that producers can charge; this price must lie below the equilibrium price in order for the price ceiling to have an effect.The price ceiling is usually instituted via law and is typically applied to necessary goods like food, rent, and energy sources in order to ensure that everyone has access to them.Benefits and Downsides:Price ceilings are beneficial to society, and are often necessary, in that they make sure that essential goods are financially accessible to the average person, at least in the short run. By lowering costs, price ceilings also have the beneficial effect of helping to stimulate demand, which can contribute to the health of an economy.However, there can also be downsides to price ceilings. While they stimulate demand, price ceilings can also cause shortages. Where the ceiling is set, there is more demand than at the equilibrium price. This means that the amount of the good or service supplied is less than the quantity demanded.For example, in agriculture, medicine, and education, many governments set maximum prices to make the needed goods or services more affordable. Producers may respond to such an economic situation by rationing supplies, decreasing production levels or lowering the quality of production, making the consumer pay extra for otherwise free elements of the good (features, options, etc.), and more.Q. How do the producers respond to the situation of price ceiling?a)Rationing suppliesb)Decreasing production levelc)Lowering the quality of productiond)All of the aboveCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for Direction: Read the following passage and answer the questions that follows:More specifically, a price ceiling (in other words, a maximum price) is put into effect when the government believes the price is too high and sets a maximum price that producers can charge; this price must lie below the equilibrium price in order for the price ceiling to have an effect.The price ceiling is usually instituted via law and is typically applied to necessary goods like food, rent, and energy sources in order to ensure that everyone has access to them.Benefits and Downsides:Price ceilings are beneficial to society, and are often necessary, in that they make sure that essential goods are financially accessible to the average person, at least in the short run. By lowering costs, price ceilings also have the beneficial effect of helping to stimulate demand, which can contribute to the health of an economy.However, there can also be downsides to price ceilings. While they stimulate demand, price ceilings can also cause shortages. Where the ceiling is set, there is more demand than at the equilibrium price. This means that the amount of the good or service supplied is less than the quantity demanded.For example, in agriculture, medicine, and education, many governments set maximum prices to make the needed goods or services more affordable. Producers may respond to such an economic situation by rationing supplies, decreasing production levels or lowering the quality of production, making the consumer pay extra for otherwise free elements of the good (features, options, etc.), and more.Q. How do the producers respond to the situation of price ceiling?a)Rationing suppliesb)Decreasing production levelc)Lowering the quality of productiond)All of the aboveCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of Direction: Read the following passage and answer the questions that follows:More specifically, a price ceiling (in other words, a maximum price) is put into effect when the government believes the price is too high and sets a maximum price that producers can charge; this price must lie below the equilibrium price in order for the price ceiling to have an effect.The price ceiling is usually instituted via law and is typically applied to necessary goods like food, rent, and energy sources in order to ensure that everyone has access to them.Benefits and Downsides:Price ceilings are beneficial to society, and are often necessary, in that they make sure that essential goods are financially accessible to the average person, at least in the short run. By lowering costs, price ceilings also have the beneficial effect of helping to stimulate demand, which can contribute to the health of an economy.However, there can also be downsides to price ceilings. While they stimulate demand, price ceilings can also cause shortages. Where the ceiling is set, there is more demand than at the equilibrium price. This means that the amount of the good or service supplied is less than the quantity demanded.For example, in agriculture, medicine, and education, many governments set maximum prices to make the needed goods or services more affordable. Producers may respond to such an economic situation by rationing supplies, decreasing production levels or lowering the quality of production, making the consumer pay extra for otherwise free elements of the good (features, options, etc.), and more.Q. How do the producers respond to the situation of price ceiling?a)Rationing suppliesb)Decreasing production levelc)Lowering the quality of productiond)All of the aboveCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Direction: Read the following passage and answer the questions that follows:More specifically, a price ceiling (in other words, a maximum price) is put into effect when the government believes the price is too high and sets a maximum price that producers can charge; this price must lie below the equilibrium price in order for the price ceiling to have an effect.The price ceiling is usually instituted via law and is typically applied to necessary goods like food, rent, and energy sources in order to ensure that everyone has access to them.Benefits and Downsides:Price ceilings are beneficial to society, and are often necessary, in that they make sure that essential goods are financially accessible to the average person, at least in the short run. By lowering costs, price ceilings also have the beneficial effect of helping to stimulate demand, which can contribute to the health of an economy.However, there can also be downsides to price ceilings. While they stimulate demand, price ceilings can also cause shortages. Where the ceiling is set, there is more demand than at the equilibrium price. This means that the amount of the good or service supplied is less than the quantity demanded.For example, in agriculture, medicine, and education, many governments set maximum prices to make the needed goods or services more affordable. Producers may respond to such an economic situation by rationing supplies, decreasing production levels or lowering the quality of production, making the consumer pay extra for otherwise free elements of the good (features, options, etc.), and more.Q. How do the producers respond to the situation of price ceiling?a)Rationing suppliesb)Decreasing production levelc)Lowering the quality of productiond)All of the aboveCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice Commerce tests.