Assume there is a price ceiling imposed on a good which is below the equilibrium price. Which of the following changes would reduce the size of the shortage?
A)an increase in demand
B)a decrease in demand
C)a decrease in supply
D)a lower price ceiling

Question

Assume there is a price ceiling imposed on a good which is below the equilibrium price. Which of the following changes would reduce the size of the shortage?
A)​an increase in demand
B)​a decrease in demand
C)​a decrease in supply
D)​a lower price ceiling

Quizplus · Accepted Answer

A decrease in demand would reduce the size of the shortage by lowering the quantity demanded, making it closer to the quantity supplied at the price ceiling.

Assume There Is a Price Ceiling Imposed on a Good