Asked by
Katherine Antunez
on Oct 13, 2024
Verified
If the government legislates a price ceiling that is above the equilibrium price
A) a shortage will develop.
B) some non-price method of rationing will develop.
C) market price and quantity sold will be unaffected.
D) a surplus will develop.
Price Ceiling
A government-imposed limit on how high a price can be charged for a product or service.
Equilibrium Price
The market price at which the quantity demanded of a good equals the quantity supplied, resulting in no surplus or shortage in the market.
Shortage
This occurs when the demand for a good or service exceeds its supply within a specific market.
- Acquire knowledge about the consequences of abolishing price limits on the market's state.
Verified Answer
AD
Learning Objectives
- Acquire knowledge about the consequences of abolishing price limits on the market's state.