Use the figure below to answer the following question(s).
Figure 4-4

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.

Question

Use the figure below to answer the following question(s).
Figure 4-4

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.

Quizplus · Accepted Answer

Imposing a price ceiling of "a" will create a situation where the price is below the equilibrium price. This will result in excess demand or shortage of the product because more consumers will demand the product at the lower price, but fewer producers will supply it at that price.

Use the Figure Below to Answer the Following Question(s)