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price cap regulation is defined as regulation that group of answer choices imposes a price ceiling on the regulated firm. uses average cost pricing to ensure costs are covered. uses marginal cost pricing to ensure efficient output. encourages firms to exaggerate costs to increase profits. is essentially the same as rate of return regulation.

Respuesta :

Imposes a price ceiling on the regulated firm, A price ceiling is a government-imposed limit on the maximum price that can be charged for a good or service. It is a type of price control.

When a market's price cap is implemented?

Demand outpaces supply when a market's price ceiling is in place. The ceiling price is below equilibrium, which causes this. As a result, more consumers will be able to afford the good while producers charge less. Once a result, as the price ceiling is implemented, supply decreases and demand increases.

What occurs if price controls are implemented by the government?

In the field of economics, price controls are limitations imposed by authorities to maintain the affordability of goods and services. They are also employed to establish an open and equitable market. Price limits are intended to reduce inflation and promote market equilibrium.

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