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Suppose S1 Represents the Initial Market Supply in the Graph

Question 51

Multiple Choice

Suppose S1 represents the initial market supply in the graph shown. A price ceiling is then set at $8. If supply shifts from S1 to S2, what will occur? A) The price ceiling will no longer be binding. B) The price ceiling will prevent output from changing. C) The size of the shortage will increase. D) The market will not reach equilibrium. Suppose S1 represents the initial market supply in the graph shown. A price ceiling is then set at $8. If supply shifts from S1 to S2, what will occur?


A) The price ceiling will no longer be binding.
B) The price ceiling will prevent output from changing.
C) The size of the shortage will increase.
D) The market will not reach equilibrium.

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