Which of the following are commonly used by governments to maintain and manipulate market prices?

• A. Monopolistic competition and oligopoly
• B. Advertising and branding
• C. Price ceilings and price floors
• D. Subsidies and tariffs

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the context of the question, which asks about tools governments use to maintain and manipulate market prices. This involves recognizing government interventions in markets.
2. Step 2: Identify that 'Monopolistic competition and oligopoly' are market structures, not government tools, so they are not correct answers for government price manipulation.
3. Step 3: Recognize that 'Advertising and branding' are strategies used by firms to influence consumer preferences, not direct government interventions in prices.
4. Step 4: Note that 'Price ceilings and price floors' are direct government-imposed limits on how high or low prices can go, making them common tools for controlling market prices.
5. Step 5: Understand that 'Subsidies and tariffs' are also government policies that affect prices indirectly by altering costs or trade conditions, thus they are also used to influence market prices.