Which of the following observations would be consistent with the imposition of a price ceiling that is higher than equilibrium price? After the price ceiling is established,
A)there will be no effect on the market price or quantity sold.
B)a smaller quantity of the good is demanded.
C)a larger quantity of the good is supplied.
D)the price rises above the previous equilibrium.

Question

Quizplus · Accepted Answer

A price ceiling set above the equilibrium price does not affect the market because the market price is naturally lower than the ceiling, allowing supply and demand to determine price and quantity as if the ceiling were not there.

Which of the Following Observations Would Be Consistent with the Imposition