Exhibit 5-3 Use the following information about demand and supply schedules to answer the question. ARefer to Exhibit 5-3.Suppose that D₁ and S₂ are the demand and supply schedules for Product A.If the government imposes a price ceiling of $4: A) a 5 unit shortage will result. B) a 5 unit surplus will result. C) a 10 unit surplus will result. D) a 10 unit shortage will result.

Question

Quizplus · Accepted Answer

At a price of $4, the quantity demanded is 11 units and the quantity supplied is 1 unit, resulting in a shortage of 10 units (11-1=10). Therefore, a 10 unit shortage will result.

Exhibit 5-3 Use the Following Information About Demand and Supply