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Figure: Effects of Price Ceilings
-(Figure: Effects of Price Ceilings) Refer to the figure. At a price ceiling of $2 per unit, consumers are willing to pay a maximum of:
A) $2.00.
B) $2.50.
C) $3.00.
D) $4.00.

Question

Use the following to answer questions:
Figure: Effects of Price Ceilings 
-(Figure: Effects of Price Ceilings) Refer to the figure. At a price ceiling of $2 per unit, consumers are willing to pay a maximum of:
A) $2.00. 
B) $2.50. 
C) $3.00. 
D) $4.00.

Quizplus · Accepted Answer

At a price ceiling of $2 per unit, the quantity demanded exceeds the quantity supplied and a shortage occurs. Consumers are willing to pay up to the point where the demand curve intersects the supply curve, which is at a price level of $3. Thus, consumers are willing to pay a maximum of $3 per unit, even though the price ceiling is set at $2.

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