Refer to the accompanying figure,which shows both short-run and long-run demand and supply curves.If there is a $4 binding price ceiling imposed on a pharmaceutical drug,what will be the amount of the disequilibrium in the short run?
A) There will be a shortage of 1,500,000 units.
B) There will be a shortage of 800,000 units.
C) There will not be a shortage; there will be a surplus.
D) There will be a shortage of 2,000,000 units.
E) There will be a shortage of 500,000 units.

Question

Refer to the accompanying figure,which shows both short-run and long-run demand and supply curves.If there is a $4 binding price ceiling imposed on a pharmaceutical drug,what will be the amount of the disequilibrium in the short run? 
A) There will be a shortage of 1,500,000 units. 
B) There will be a shortage of 800,000 units. 
C) There will not be a shortage; there will be a surplus. 
D) There will be a shortage of 2,000,000 units. 
E) There will be a shortage of 500,000 units.

Quizplus · Accepted Answer

At a price of $4, the quantity demanded (Qd) exceeds the quantity supplied (Qs) by 800,000 units, as shown by the vertical distance between the demand and supply curves at that price. This is known as a shortage.

Refer to the Accompanying Figure,which Shows Both Short-Run and Long-Run