Asked by
Melissa Amstutz
on Oct 13, 2024
Verified
If the price ceiling is set above the equilibrium price,
A) there will be a surplus.
B) there will be a shortage.
C) quantity demanded will equal quantity supplied.
D) demand will be less than supply.
Price Ceiling
A legally established maximum price that can be charged for a product or service, often set by government to prevent prices from reaching excessively high levels.
Equilibrium Price
The price at which the quantity of a good or service demanded by consumers is equal to the quantity supplied by producers, resulting in a state of balance.
Surplus
The situation in which the quantity supplied of a good exceeds the quantity demanded, often leading to a decrease in prices.
- Gain an understanding of the roles of price ceilings and price floors in economic markets.
- Recognize the factors that cause surpluses and shortages to happen in the market.
Verified Answer
MM
Learning Objectives
- Gain an understanding of the roles of price ceilings and price floors in economic markets.
- Recognize the factors that cause surpluses and shortages to happen in the market.