PPT Module 7_Interaksyon ng Demand at Supply- Price Control _Part 2

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10 Terms

1
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What is a price ceiling?
A legal maximum on the price that may be charged for a commodity.
2
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What is a price floor?
A legal minimum on the price that may be charged for a commodity.
3
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What is the effect of setting a price ceiling below equilibrium price?
It leads to a shortage of the commodity.
4
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What is the effect of setting a price floor above equilibrium price?
It leads to a surplus of the commodity.
5
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What does the Price Control Act (RA 7581) aim to accomplish?
It regulates the maximum and minimum prices to make basic commodities affordable.
6
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What is a key problem associated with a price floor?
Chronic surplus of goods and potential unemployment when applied to minimum wage.
7
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What is a black market in the context of price ceilings?
An illegal marketplace where goods are sold at prices above the price ceiling.
8
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What is a cartel?
An organization of firms that coordinate to limit competition and set prices, such as OPEC.
9
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What is the government's role in price control?
To legally restrict how high or low a market price can be.
10
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What happens when a price ceiling is set significantly below the equilibrium price?
A shortage occurs, where demand exceeds supply.