-Refer to Table 3.4. If a price ceiling of $55 is imposed,
A) a shortage equal to 250 units will result.
B) a shortage equal to 200 units will result.
C) a surplus equal to 200 units will result.
D) the price will be forced to the equilibrium price before the ceiling.
E) the price will be above the equilibrium price.

Question

-Refer to Table 3.4. If a price ceiling of $55 is imposed,
A) a shortage equal to 250 units will result. 
B) a shortage equal to 200 units will result. 
C) a surplus equal to 200 units will result. 
D) the price will be forced to the equilibrium price before the ceiling. 
E) the price will be above the equilibrium price.

Quizplus · Accepted Answer

A price ceiling set below the equilibrium price causes a shortage. If the equilibrium price is above $55, a shortage of 200 units will occur as the quantity demanded exceeds the quantity supplied at the ceiling price.