Asked by Colton Weatherwax on May 11, 2024
Verified
Refer to Figure 4.3. At an effective price ceiling for pencils,
A) quantity demanded is greater than quantity supplied.
B) quantity demanded is less than quantity supplied.
C) quantity demanded is equal to quantity supplied.
D) price is above equilibrium.
Price Ceiling
A legally imposed limit on how high a price can be charged for a product, service, or resource.
Quantity Demanded
The total amount of a goods or services consumers are willing and able to purchase at a specific price point.
Quantity Supplied
The total amount of a product that producers are willing and able to sell at a given price over a specified period of time.
- Comprehend the effects of government-imposed price controls on market equilibrium.
- Analyze the impact of excess supply and demand in markets.
Verified Answer
GB
Gurjot BadyalMay 16, 2024
Final Answer :
A
Explanation :
A price ceiling set below the equilibrium price results in a quantity demanded that is greater than the quantity supplied, leading to a shortage.
Learning Objectives
- Comprehend the effects of government-imposed price controls on market equilibrium.
- Analyze the impact of excess supply and demand in markets.