Who is most likely to support the imposition of a price ceiling on a good?

• A. Government officials seeking to increase tax revenue
• B. Consumers who believe the current price is too high
• C. Producers who want to maximize their profits
• D. Suppliers facing rising production costs

Answer: (B)

Verified step by step guidance

1. Step 1: Understand what a price ceiling is. A price ceiling is a legal maximum price set by the government that sellers cannot exceed when selling a good or service.
2. Step 2: Consider the effects of a price ceiling on different market participants. A price ceiling set below the equilibrium price typically lowers the price consumers pay, benefiting consumers but potentially harming producers.
3. Step 3: Analyze the motivations of each group: Government officials seeking to increase tax revenue usually prefer higher prices or larger quantities sold, so they are less likely to support a price ceiling that might reduce tax revenue.
4. Step 4: Producers who want to maximize profits generally oppose price ceilings because these limits reduce the price they can charge, thus lowering their potential profits.
5. Step 5: Consumers who believe the current price is too high are most likely to support a price ceiling because it can lower prices and make the good more affordable for them.