Which of the following sets the upper limit for a product's pricing?

• A. Price floor
• B. Equilibrium price
• C. Black market price
• D. Price ceiling

Answer: (D)

Verified step by step guidance

1. Understand the concept of a price ceiling: it is a government-imposed limit that sets the maximum price a seller can charge for a product, effectively creating an upper limit on pricing.
2. Recognize that a price floor, in contrast, sets a minimum price, preventing prices from falling below a certain level.
3. Know that the equilibrium price is the price at which quantity demanded equals quantity supplied, determined by market forces without direct government intervention.
4. Identify that a black market price arises when goods are sold illegally, often above the legal price ceiling, but it is not an official or regulated price limit.
5. Conclude that among the options, the price ceiling is the correct term for the upper limit on a product's price.