If a price ceiling is set below the equilibrium price in a market,
A) rationing will be unnecessary.
B) surpluses of the commodity will develop.
C) the quantity demanded will exceed the quantity supplied.
D) the quantity supplied will exceed the quantity demanded.

Question

Quizplus · Accepted Answer

When a price ceiling is set below the equilibrium price, it causes the quantity demanded to exceed the quantity supplied, leading to shortages, not surpluses. Rationing becomes more likely as there isn't enough of the commodity to satisfy all the demand at that price.

If a Price Ceiling Is Set Below the Equilibrium Price