Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Balance
B
Safety net
C
High winds
D
Spectators
Understanding the Answer
Let's break down why this is correct
Answer
Price controls, like price ceilings and price floors, are rules set by the government to limit how high or low prices can go in a market. This is similar to a tightrope walker who must maintain balance while walking on a tightrope; if they lean too much to one side, they risk falling. Just as the tightrope walker must adjust their position to stay balanced, markets must adjust to maintain equilibrium when price controls are in place. For example, if a government sets a price ceiling on rent to keep it affordable, it may lead to a shortage of available apartments because landlords might not find it profitable to rent. In both cases, the challenge is to find stability, whether on a tightrope or in a market.
Detailed Explanation
High winds can make it hard for a tightrope walker to stay balanced. Other options are incorrect because Balance is what the tightrope walker aims for; A safety net helps catch someone if they fall.
Key Concepts
Price Controls
Market Equilibrium
Market Inefficiencies
Topic
Price Controls and Market Outcomes
Difficulty
hard level question
Cognitive Level
understand
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