Given the demand and supply conditions shown in Figure 4-4, what will happen as the result of imposing a price ceiling of a?

A) Demand for the product will decline.
B) Supply will increase.
C) There will be a shortage of the product.
D) Over time, the quality of the product offered by suppliers will increase.

Price Ceiling

A government-imposed limit on how high a price of a good or service can be charged in the market.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices during a given period.

Supply Conditions

Factors that affect the ability and willingness of producers to offer goods and services for sale, including technology, resource prices, and regulatory environment.