When does the government put price ceiling ........

Introductory Macro Economics Government Budget and Economy

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When does the government put price ceiling?

Government believes that prices are too high.

Government believes that prices are too low.

Government wants to show who is the boss.

None of the above

Explanation:

Option (1) is correct.
Explanation: When the government thinks that the prices are too high for the essential commodities like food, medicine etc, then government sets the maximum price that
producers can charge, this price lies below the equilibrium price so as the price ceiling can be effective.

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