The government imposing upper limit on the price of goods and services is called a) price ceiling. B) service floor . C) price floor D) none of the above

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Solution

Dear Student

The answer is a) Price Ceiling
A price ceiling is the mandated maximum amount a seller is allowed to charge for a product or service. Usually set by law, price ceilings are typically applied only to staples such as food and energy products when such goods become unaffordable to regular consumers. Some areas have rent ceilings to protect renters from rapidly climbing rates on residences.A price ceiling is essentially a type of price control.

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