Question
What is maximum price ceiling? Explain its implications.
Since such a price is below the equilibrium price, it leads to shortage because demand is greater than supply at this price. The shortage in turn may lead to black marketing.
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| (Rs. lacs) | ||
| (i) | Fixed capital good with a life span of 5 years | 15 |
| (ii) | Raw materials | 6 |
| (iii) | Sales | 25 |
| (iv) | Net change in stock | (−) 2 |
| (v) | Taxes on production | 1 |
Number Workers(per day) | Total Product (Pizzas per day) |
0 | 0 |
1 | 100 |
2 | 200 |
3 | 300 |
4 | 400 |
5 | 500 |
| Amount Consumed | Marginal Utility |
| 0 | - |
| 1 | 10 |
| 2 | 25 |
| 3 | 38 |
| 4 | 48 |
| 5 | 55 |