Understanding "Quality Waste" in Economics

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Question:

A “quality waste” refers to:

a decrease in quality under a price floor. an increase in quality under a price ceiling. a decrease in quality under a price ceiling. an increase in quality under a price floor.

Answer:

A “quality waste” typically refers to a decrease in quality under a price ceiling. When a price ceiling is imposed, it can lead to a situation where suppliers may reduce the quality of their goods or services because they cannot charge a price that reflects the true cost of production. Therefore, the correct answer is:

a decrease in quality under a price ceiling.