Asked by Colleen Tercek on Jul 15, 2024
Verified
(Table: Quantity Supplied and Quantity Demanded) Use Table: Quantity Supplied and Quantity Demanded.If a price ceiling of $10 is imposed in this market:
A) the quantity demanded will be greater than the quantity supplied.
B) the quantity supplied will be greater than the quantity demanded.
C) an equilibrium quantity will result.
D) excess supply equal to 25 units will result.
Price Ceiling
A government-imposed limit on how high a price can be charged on a product or service, typically set below the equilibrium price to make goods more affordable.
Quantity Demanded
The total amount of a good or service that consumers are willing and able to purchase at a given price over a specified period.
Quantity Supplied
The amount of a good or service that sellers are willing and able to sell at a particular price over a specified period.
- Understand the concepts of price ceilings and their impact on market equilibrium.
Verified Answer
BM
Bianca MirandaJul 21, 2024
Final Answer :
A
Explanation :
A price ceiling set below the equilibrium price (assuming the equilibrium price is higher than $10 based on the table not provided) leads to a situation where the quantity demanded exceeds the quantity supplied, creating a shortage.
Learning Objectives
- Understand the concepts of price ceilings and their impact on market equilibrium.